RTX Shifts from Space Prime to Component Supplier: Overcoming Technical Learning and Testing Challenges

In a shift from its traditional role as a prime contractor in the space industry, RTX announced during its April 23 earnings call that it will focus on being a supplier of payloads, sensors, and components to other companies. President and chief operating officer Chris Calio made the announcement, highlighting the company’s existing strengths in these areas.

RTX has a historical strength in certain space areas and key components used in prime satellites and buses. Calio stated that the company will move away from the space prime role to become more of a component supplier. This shift is seen as a pivot from being a space prime to being a component supplier.

In March, RTX withdrew from a fixed-price agreement to build seven missile tracking satellites for the Space Development Agency due to profitability concerns. Director Derek Tournear confirmed that RTX-made components will still be used in satellites built by L3Harris and Northrop Grumman. Despite this setback, RTX had already been transitioning from the space prime role previously, with a focus on a merchant strategy.

Despite facing headwinds in technical learning and testing, RTX plans to overcome these obstacles and continue its shift towards becoming a component supplier. The company reported a loss of about $28 million on classified programs in the first quarter, with Calio indicating that these losses would continue for another 12-18 months.