RTX (RTX) Earnings Date & Reports

Key Takeaways

• RTX reported second quarter 2026 adjusted earnings per share (EPS) of $1.89, up 21% year over year and ahead of consensus estimates of about $1.66.
• Adjusted sales reached $24.7 billion, up 14% on an adjusted basis and 16% organically, exceeding analyst expectations of roughly $22.8 billion to $22.9 billion.
• The company generated $2.9 billion in free cash flow and expanded segment margins by 40 basis points.
• Total backlog hit a record $289 billion, up 22% year over year, while Raytheon booked nearly $20 billion in awards for a book-to-bill of 2.42.
• Management raised full-year 2026 guidance for adjusted sales, adjusted EPS, and free cash flow.

Earnings Context and Why It Matters

RTX Corporation, a diversified aerospace and defense company whose businesses include Collins Aerospace, Pratt & Whitney, and Raytheon, entered the quarter riding a wave of demand across both commercial aviation and defense markets. The second quarter is a key barometer for investors because it tests whether strong bookings are converting into revenue, profit, and cash flow at the same time the company works through the Pratt & Whitney GTF (geared turbofan) engine fleet management plan. With a record backlog and rising international defense budgets, this report was closely watched as a signal of whether RTX could sustain double-digit growth while improving margins and generating stronger free cash flow.

Reported Results

For the second quarter of 2026, RTX reported adjusted sales of $24.7 billion, up 14% on an adjusted basis and 16% organically year over year. Growth was broad-based, with commercial original equipment (OE) up 9%, commercial aftermarket up 18%, and defense up 16%. Adjusted EPS came in at $1.89, a 21% increase from the prior year and well above the consensus estimate of about $1.66. On a GAAP basis, EPS from continuing operations was $1.57, reflecting acquisition accounting adjustments and restructuring items.

All three segments contributed. Collins Aerospace posted sales of $8.2 billion, up 13% organically. Pratt & Whitney delivered $8.9 billion, up 17% organically, helped by a 25% increase in commercial aftermarket. Raytheon grew 18% organically to $8.3 billion, with margins expanding 100 basis points. Free cash flow totaled $2.9 billion, and the company's backlog reached a record $289 billion.

Management raised its full-year outlook: adjusted sales are now expected to be $95 billion to $96 billion, adjusted EPS $7.10 to $7.25, and free cash flow $8.5 billion to $8.75 billion, up from prior ranges.

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Market Reaction and Investor Sentiment

Investors received the report favorably, as the earnings and revenue beat was accompanied by an upgraded full-year outlook and record bookings. The stock posted a positive post-earnings drift, with analysts at firms including RBC Capital, Susquehanna, and TD Cowen reiterating favorable ratings and raising price targets in the days following the release. Sentiment was supported by a record $289 billion backlog, a Raytheon book-to-bill of 2.42, and strong international defense demand, which exceeded $10 billion in first-half awards. The market's interpretation was that RTX's growth is increasingly backed by contracted demand rather than one-time factors, even as investors weighed near-term headwinds such as commercial OE mix pressure at Pratt & Whitney and working-capital builds tied to higher production.

Forward Outlook and Key Factors to Monitor

Following the raised guidance, the focus shifts to execution across a record backlog and the conversion of framework agreements into definitive contracts. RTX continues to work with U.S. and allied customers to turn several multi-year munitions framework agreements into formal awards, which management noted are not yet included in the backlog and could represent meaningful future demand.

On the commercial side, investors should watch the pace of the Pratt & Whitney GTF fleet recovery. The number of PW1100 aircraft on ground (AOG) declined 25% year to date, supported by maintenance, repair, and overhaul (MRO) output that rose more than 40% and a 23% reduction in turnaround time. Sustaining that improvement, along with ramping GTF Advantage engine deliveries, will be important to the aftermarket trajectory.

Margin expansion, cost trends, and free cash flow conversion also remain in focus. Management flagged working capital and inventory builds to support higher production as a potential near-term headwind, alongside some tariff and selling, general, and administrative cost pressures at Collins. Finally, defense budget dynamics, including the proposed increase in 2027 U.S. defense spending and continued strong international demand for air and missile defense systems, will shape the outlook for Raytheon and the broader portfolio.

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