RTX Corporation
RTX · NYSE
Next quarter
Expected to report Jan 26, 2027 — estimated from last year’s reporting date.
Consensus is $1.83 EPS for Dec 2026 across 5 estimates, ranging $1.82 to $1.84.
RTX Sep 2026
- 26.97%
- $1.78
- $2.26
- —
- $24.96B
Reported results
- $24.96B
- $3.34B
- 13.37%
- $2.58B
- $1.89
Highlights
- Earnings beat: Adjusted EPS was $2.26, 27% above the supplied $1.78 consensus and up 33% from $1.70 a year ago; the quarter included $0.25 per share of IEEPA cost recovery.
- Broad-based growth: Sales of $24.97 billion rose 11% year over year and 1% from Q2; adjusted operating profit was $3.99 billion versus $2.97 billion a year ago.
- Raised outlook: RTX lifted 2026 adjusted sales guidance to $97.0–$97.5 billion, adjusted EPS to $7.65–$7.75, and free cash flow to $9.0–$9.2 billion.
- Record demand: Backlog reached $340 billion, including $176 billion commercial and $164 billion defense; new awards exceeded $81 billion, with multi-year Tomahawk and AMRAAM production contracts awarded.
- Collins strength: Sales increased 10% to $8.38 billion and adjusted operating profit rose 50% to $1.79 billion; commercial original-equipment sales grew 23%.
- Pratt bankruptcy charge: Sales rose 10% to $9.23 billion, but reported operating profit fell 19% to $608 million, including a $363 million customer-bankruptcy charge; adjusted profit increased 29% to $968 million.
- Raytheon momentum: Sales grew 14% to $8.03 billion and adjusted operating profit increased 32% to $1.13 billion, driven by higher defense-program volume, productivity, and mix.
- Cash conversion: Free cash flow was $2.12 billion, down 47% year over year from $4.03 billion; operating cash flow included approximately $0.3 billion of IEEPA recovery.
Analysis
RTX delivered a strong, broad-based third quarter, with adjusted EPS of $2.26 beating the supplied $1.78 consensus by 27%. Sales of $24.97 billion increased 11% from a year ago and about 1% from Q2 FY2026. Reported operating income rose to $3.34 billion from $2.52 billion a year ago and $2.81 billion in the prior quarter; net income attributable to common shareowners was $2.58 billion, versus $1.92 billion and $2.14 billion, respectively. Adjusted EPS grew 33% year over year, although $0.25 of the quarter’s result came from IEEPA recovery. GAAP diluted EPS was $1.89, including acquisition-accounting and restructuring and other items.
The print was defined by sustained commercial aerospace and defense demand, strong Collins and Raytheon execution, and Pratt & Whitney’s customer-bankruptcy charge. Adjusted profit grew across all three segments, while Pratt’s $363 million charge pushed reported segment profit lower. Cash was a weaker year-over-year note: free cash flow fell 47% to $2.12 billion, including about $0.3 billion of IEEPA recovery, against a high $4.03 billion comparison. With backlog at a record $340 billion and more than $81 billion of new awards, RTX raised full-year 2026 adjusted sales, EPS, and free-cash-flow guidance.
Results and outlook
RTX raised its full-year outlook after a quarter of double-digit organic sales growth and higher adjusted earnings. The EPS comparison deserves context: adjusted EPS was $2.26, while GAAP diluted EPS was $1.89; the adjusted figure includes $0.25 per share from IEEPA recovery. GAAP net income attributable to common shareowners was $2.58 billion, and adjusted net income was $3.09 billion.
- Sales: Revenue was $24.97 billion, up 11% year over year and 12% organically; versus Q2 FY2026’s $24.71 billion, sales increased about 1%.
- Profit: GAAP operating income was $3.34 billion, up from $2.52 billion a year ago and $2.81 billion in Q2. Adjusted operating profit was $3.99 billion versus $2.97 billion a year ago.
- 2026 guidance: Adjusted sales are now expected at $97.0–$97.5 billion, up from $95.0–$96.0 billion; organic growth guidance rises to 10–11% from 8–9%. Adjusted EPS guidance increases to $7.65–$7.75 from $7.10–$7.25, and free-cash-flow guidance to $9.0–$9.2 billion from $8.50–$8.75 billion.
Commercial aerospace
Collins Aerospace combined strong volume with better mix and tariff recovery. Sales growth extended across commercial original equipment, aftermarket, and defense, while higher commercial volume and mix helped drive a marked expansion in adjusted margin.
- Collins sales: Revenue rose 10% to $8.38 billion, or 12% organically excluding divestitures. Commercial OE increased 23%, commercial aftermarket 9%, and defense 7%.
- Collins profitability: Adjusted operating profit increased 50% to $1.79 billion, and adjusted margin expanded to 21.3% from 15.7%. Drivers included commercial-volume drop-through, mix, and approximately $250 million of IEEPA recovery.
- Pratt aftermarket: Pratt & Whitney sales grew 10% to $9.23 billion, driven by a 21% increase in commercial aftermarket, primarily higher GTF volume. Commercial OE declined 5% because of large-engine mix, while military sales rose 2%.
Defense demand
Raytheon’s higher volume and improved execution reinforced the demand picture behind the record backlog. RTX reported more than $81 billion in new commercial and defense awards in the quarter. Raytheon was awarded multi-year undefinitized production contracts for Tomahawk and AMRAAM; the filing also describes additional multi-year munition production actions, with funding subject to annual Congressional appropriations.
- Raytheon sales: Revenue increased 14% to $8.03 billion, driven by naval programs and land- and air-defense systems, including Patriot, Standard Missile, and Tomahawk.
- Raytheon profitability: Adjusted operating profit increased 32% to $1.13 billion, with margin improving to 14.1% from 12.2%. Drivers included productivity, volume, and mix; about $85 million of benefits related to an international contract modification and offset-obligation adjustment.
- Backlog: Company backlog totaled $340 billion, comprising $176 billion commercial and $164 billion defense. RTX expects to recognize about 25% of remaining performance obligations over the next 12 months.
Pratt & Whitney charge
Pratt’s revenue growth did not translate into higher reported operating profit because of an unusual customer-bankruptcy charge. Excluding that item and other adjustments, adjusted operating profit grew, but the business also faced unfavorable large commercial OE and aftermarket mix and higher SG&A. Separately, the filing says elevated aircraft-on-ground levels tied to the GTF powder-metal matter are expected to persist through 2026.
- Bankruptcy impact: Reported operating profit fell 19% to $608 million and margin declined to 6.6%; results included a $363 million charge, primarily related to contract-asset exposure.
- Adjusted performance: Adjusted operating profit rose 29% to $968 million, and adjusted margin increased to 10.5% from 8.9%. Higher aftermarket volume and approximately $160 million of IEEPA recovery supported growth, partly offset by mix and SG&A.
- Powder-metal context: The filing reports $0.2 billion of accrued customer compensation at September 30, 2026, down from $0.7 billion at year-end 2025, mainly due to customer credits issued during the first nine months.
Cash flow
Quarterly cash flow was substantially below the prior-year period even as the company raised its full-year free-cash-flow target. Operating cash flow included a tariff-related recovery, and higher capital spending also reduced the amount available as free cash flow. The supplied results do not provide Q2 cash-flow figures for a sequential comparison.
- Quarter cash: Operating cash flow was $2.87 billion, down 38% from $4.64 billion a year ago; free cash flow was $2.12 billion, down 47% from $4.03 billion.
- Recovery and investment: Operating cash flow included approximately $0.3 billion of IEEPA recovery. Capital expenditures were $749 million, compared with $614 million in the year-ago quarter.
- Year-to-date: Through September, operating cash flow was $8.27 billion and free cash flow was $6.31 billion, versus $6.40 billion and $4.75 billion, respectively, in the prior-year period.
