RTX Q2 Earnings Outpace Estimates, Revenues Increase Y/Y

RTX Corporation’s RTX second-quarter 2026 adjusted earnings per share (EPS) of $1.89 beat the Zacks Consensus Estimate of $1.66 by 13.9%. The bottom line improved 21.1% from the year-ago quarter’s level of $1.56.

RTX’s Total Revenues

Revenues rose 14.5% year over year to $24.71 billion and beat the consensus mark of $22.83 billion by 8.2%. Growth was supported by higher commercial aftermarket and defense demand. Backlog climbed 22% to $289 billion.

RTX Corporation Price, Consensus and EPS Surprise

RTX Benefits From Broad-Based Organic Growth

Organic sales advanced 16% in the quarter. Commercial aftermarket revenues increased 18%, while defense sales grew 16%, excluding acquisitions, divestitures and foreign-currency effects. Commercial original equipment sales were up 9%.

The company secured $43 billion of new awards during the quarter, including nearly $20 billion at Raytheon. The total backlog comprised $170 billion of commercial orders and $119 billion of defense orders, providing strong visibility into future production requirements.

RTX’s Operational Performance

Total costs and expenses increased 12.8% year over year to $21.96 billion. Cost of sales rose to $19.58 billion from $17.21 billion, while selling, general and administrative expenses increased to $1.66 billion from $1.57 billion.

Adjusted segment operating profit advanced 18%, with consolidated adjusted segment margin expanding 40 basis points to 12.4%. Reported operating profit rose to $2.81 billion from $2.15 billion, while the reported operating margin improved to 11.4% from 9.9%.

RTX’s Segmental Performance

Collins Aerospace generated sales of $8.21 billion, up 8% year over year and 13% organically. Commercial original equipment sales increased 26%, commercial aftermarket revenues rose 10%, and defense sales improved 7%.

Pratt & Whitney’s sales rose 16% to $8.89 billion, with organic growth of 17%. Commercial aftermarket sales jumped 25%, and military revenues increased 23%. Commercial original equipment sales declined 8% due to large commercial engine mix.

Raytheon recorded sales of $8.27 billion, up 18% year over year. The growth reflected higher volumes across land and air defense systems, naval programs, and air and space defense systems, including Patriot, Standard Missile and AMRAAM programs.

RTX’s Financial Update

RTX had cash and cash equivalents of $8.31 billion as of June 30, 2026, compared with $7.44 billion as of Dec. 31, 2025.

The long-term debt totaled $31.86 billion as of June 30, 2026, compared with $34.29 billion as of Dec. 31, 2025.

Operating cash flow totaled $3.55 billion compared with $458 million in the prior-year quarter. Capital expenditures were $669 million, resulting in free cash flow of $2.88 billion versus negative $72 million a year earlier.

RTX Raises Its 2026 Financial Outlook

RTX raised its 2026 adjusted sales guidance to $95-$96 billion from $92.5-$93.5 billion. The company now expects organic sales growth of 8-9% compared with its prior projection of 5-6%.

Adjusted earnings are projected to be between $7.10 and $7.25 per share, up from $6.70-$6.90. Free cash flow is expected to be in the range of $8.50-$8.75 billion compared with the previous forecast of $8.25-$8.75 billion.

RTX’s Zacks Rank

The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Defense Releases

Textron TXT is slated to report second-quarter results on July 28, before market open. The Zacks Consensus Estimate for earnings is pegged at $1.52 per share, indicating a year-over-year decline of 1.9%.

TXT’s long-term (three to five years) earnings growth rate is 10.14%. The Zacks Consensus Estimate for second-quarter sales is pinned at $3.82 billion, indicating year-over-year growth of 2.8%.

General Dynamics GD is slated to report second-quarter results on July 29, before market open. The Zacks Consensus Estimate for earnings is pegged at $3.95 per share, which indicates a year-over-year increase of 5.6%. 

GD’s long-term earnings growth rate is 9.97%. The Zacks Consensus Estimate for second-quarter sales is pegged at $13.49 billion, which indicates a year-over-year increase of 3.4%. 

L3Harris Technologies LHX is slated to report second-quarter results on July 29, after market close. The Zacks Consensus Estimate for earnings is pegged at $2.80 per share.

LHX’s long-term earnings growth rate is 17.11%. The Zacks Consensus Estimate for second-quarter sales is pinned at $5.79 billion, indicating year-over-year growth of 6.8%.

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This article originally published on Zacks Investment Research (zacks.com).

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