Despite surpassing Q2 adjusted earnings projections, Raytheon Technologies (NYSE:RTX) warned that supply chain and labor availability would continue to be an issue in the near future.
The CEO of Raytheon (RTX), Greg Hayes, claimed that the business is having trouble finding the 5,000 engineers it requires and that a lack of competent personnel may be its worst problem.
According to MarketWatch, Hayes stated on the results conference call on Tuesday that Raytheon (RTX) is “aggressively managing” supply chain challenges as 330 suppliers have had employees embedded into them to boost performance.
The COVID-related economic slowdown, which resulted in many employees being laid off, was the cause of the labor shortage, according to the CEO, who also explained why it had become such an issue.
According to Hayes, “75%-80% of those folks come back off layoff, but in this case, what we’re seeing in our supply chain is only about 25% of the people are coming back. They’ve found other jobs, similar jobs.”
Hayes anticipates that labor shortages and supply chain restrictions will persist because it takes time to find and train new staff.
Robert Stallard, an analyst at Vertical Research Partners, stated that even if “supply chain and labor concerns are poised to linger in 2022, we think the picture beyond this year remains appealing.” He kept his Buy rating and $120 price target on Raytheon (RTX).
The stock price return for Raytheon Technologies (RTX) has increased by four percent year-to-date and by five percent overall.
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