RTX Corp. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. RTX Corporation operates as a global systems provider in aerospace and defense through three primary segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The company is a large accelerated filer with 1,346,683,428 shares of common stock outstanding as of the period end.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Total Net Sales | $22,076 million | $20,306 million | +8.7% |
| Operating Profit | $2,555 million | $2,035 million | +25.6% |
| Operating Margin | 11.6% | 10.0% | +160 bps |
| Net Income (Attributable to Common) | $2,059 million | $1,535 million | +34.1% |
| Diluted EPS | $1.51 | $1.14 | +32.5% |
| Operating Cash Flow | $1,855 million | $1,305 million | +42.1% |
| Cash and Equivalents | $6,818 million | $5,157 million | +32.2% |
| Total Debt | $37,413 million | $37,904 million | -1.3% |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased $1.77 billion year-over-year, driven by organic growth of $2.08 billion across all segments. This was partially offset by $370 million in net divestitures (primarily Collins Aerospace actuation and flight control businesses completed in 2025).
- Profitability Expansion: Operating profit rose $520 million, fueled by a $400 million increase in organic segment performance and a $100 million reduction in restructuring charges compared to the prior year.
- Segment Performance:
- Collins Aerospace: Sales up 5% ($7.6B); Operating profit up 20% ($1.3B) with margin expansion to 17.2%.
- Pratt & Whitney: Sales up 11% ($8.2B); Operating profit up 22% ($710M) with margin expansion to 8.7%, driven by commercial aftermarket volume.
- Raytheon: Sales up 10% ($6.9B); Operating profit up 24% ($841M) with margin expansion to 12.1%, driven by land and air defense systems (Patriot) and naval power programs.
- Tax Rate: The effective tax rate decreased to 14.4% from 17.0%, attributed to higher stock-based compensation benefits and a higher Foreign Derived Deduction Eligible Income (FDDEI) benefit from 2025 U.S. tax legislation.
Guidance, Outlook, Risks, and Unusual Items
- Backlog: Total backlog stands at $271 billion ($162B commercial, $109B defense). Defense bookings for the quarter were approximately $14 billion, a significant increase from $9 billion in Q1 2025.
- Powder Metal Matter: The ongoing Pratt & Whitney PW1100G-JM engine issue continues to impact operations. The company estimates a full-year 2026 cash impact of approximately $0.7 billion related to customer compensation and fleet management. Accrued liabilities for this matter decreased to $0.5 billion as credits were issued to customers.
- Tariffs and Trade: The company paid approximately $0.5 billion in IEEPA tariffs previously. Following a Supreme Court ruling invalidating these tariffs, the company is seeking refunds but has not recorded a recovery as of March 31, 2026, due to uncertainty in the administrative process. New tariffs imposed under other regimes are being monitored.
- Legal and Compliance: The company is subject to Deferred Prosecution Agreements (DPAs) with the DOJ and an SEC Administrative Order regarding Middle East contracts and legacy pricing disputes. A compliance monitor was engaged in April 2026. The company also faces ongoing investigations related to export controls and the powder metal disclosure.
- Capital Allocation: The company repaid $500 million in long-term debt and paid $915 million in dividends. No common stock was repurchased in Q1 2026, though $615 million remains available under the 2023 share repurchase program.
Investor Verification Checklist
- Powder Metal Cash Flow: Verify the timing and magnitude of the estimated $0.7 billion cash outflow for the PW1100G-JM matter in 2026.
- Tariff Refund Status: Monitor the administrative process for the refund of $0.5 billion in previously paid IEEPA tariffs and the impact of new tariff regimes on margins.
- Legal Settlements: Track the status of the DOJ/SEC compliance monitor engagement and any potential additional penalties related to export control violations or pricing disputes.
- Organic Growth Sustainability: Assess whether the 8.7% organic sales growth can be sustained given the divestitures in Collins and the cyclical nature of defense bookings.
- Debt Maturity Profile: Review the $37.4 billion debt portfolio, noting the average maturity of 12 years and the recent repayment of $500 million in 2026 notes.