What does gross margin mean?

How much of every sales dollar is left after the direct cost of what was sold.

How do you interpret gross margin?

Higher and stable gross margins indicate pricing power and a durable cost structure. A declining trend signals input-cost pressure, pricing competition, or a shift toward lower-margin products.

How does gross margin compare across companies?

Highly comparable within an industry, less so across industries — software runs 70%+ while distributors run in single digits. Track the trend more than the absolute level across sectors.

Raytheon Technologies RTX Gross margin

Discontinued — last reported Q1 '18

Gross margin at other companies

Howmet AerospaceHWM

35%+2.9pp

BoeingBA

4.8%+3.7pp

General ElectricGE

37.2%+2.1pp

HEICOHEI

40.1%+0.7pp

Parker-HannifinPH

37.2%+0.7pp

WoodwardWWD

28.4%+2.6pp

Other financials

Income statement

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Revenue$22.1B+8.7%

Operating income$2.6B+25.6%

Net income$2.1B+34.1%

EPS (diluted)$1.51+32.5%

Balance sheet

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Cash & equivalents$6.9B+32.3%

Total debt$38.9B-9.3%

Total equity$66.3B+7.7%

Total assets$170.43B+3.4%

Cash flow

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Operating cash flow$1.9B+42.2%

CapEx$546.0M+6.4%

Free cash flow$1.3B+65.3%

Valuation

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Market cap$259.34B+46.8%

Enterprise value$291.41B+35.9%

P/E35.7×-2.7×

P/S2.9×+0.7×

Profitability

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Operating margin10.9%+2.7pp

Net margin8%+2.4pp

Returns & leverage

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Return on equity11.4%+3.8pp

Debt / equity0.6×-0.1×

Current ratio1×0.0×

Where this comes from

Calculated from Raytheon Technologies’s reported figures.

gross profit/total revenue=48.1%

Based on trailing twelve months.

The official record: Raytheon Technologies’s 10-Q, filed April 26, 2019, on SEC EDGAR. View the filing →

Questions, answered.

What does gross margin mean?: How much of every sales dollar is left after the direct cost of what was sold.
How do you interpret gross margin?: Higher and stable gross margins indicate pricing power and a durable cost structure. A declining trend signals input-cost pressure, pricing competition, or a shift toward lower-margin products.
How does gross margin compare across companies?: Highly comparable within an industry, less so across industries — software runs 70%+ while distributors run in single digits. Track the trend more than the absolute level across sectors.