RTX Corporation’s RTX third-quarter 2026 adjusted earnings per share (EPS) of $2.26 beat the Zacks Consensus Estimate of $1.78 by 27%. The bottom line improved 32.9% from the year-ago quarter’s level of $1.70.
RTX’s Total Revenues
Revenues rose 11.1% year over year to $24.97 billion and beat the consensus mark of $24.01 billion by 4%. Growth was supported by higher commercial aftermarket and defense demand.
RTX Corporation Price, Consensus and EPS Surprise
RTX Corporation price-consensus-eps-surprise-chart | RTX Corporation Quote
RTX Benefits From Broad-Based Organic Growth
Organic sales advanced 12% in the third quarter. Commercial original equipment (OE) sales at Collins Aerospace increased 23%, while commercial aftermarket revenues rose 9% and defense sales grew 7%. At Pratt & Whitney, commercial aftermarket sales increased 21%, while military revenues rose 2%. Raytheon’s sales increased 14%, driven by higher volumes across naval programs and land and air defense systems.
The company secured more than $81 billion in new commercial and defense awards during the third quarter. Its total backlog reached a record $340 billion, comprising $176 billion of commercial orders and $164 billion of defense orders, providing strong visibility into future production requirements. RTX also secured multi-year undefinitized production contracts for the Tomahawk and AMRAAM programs.
RTX’s Operational Performance
Total costs and expenses increased 8.8% year over year to $21.79 billion. Cost of sales rose to $19.16 billion from $17.90 billion, while selling, general and administrative expenses increased to $1.92 billion from $1.44 billion.
Adjusted segment operating profit advanced 39% to $3.89 billion, with the consolidated adjusted segment operating margin expanding 310 basis points to 15.2%. Reported operating profit rose to $3.34 billion from $2.52 billion, while the reported operating margin improved to 13.4% from 11.2%.
RTX’s Segmental Performance
Collins Aerospace generated sales of $8.38 billion, up 10% year over year and 12% organically. Commercial OE sales increased 23%, commercial aftermarket revenues rose 9% and defense sales improved 7%. Higher volumes across narrowbody and widebody platforms supported commercial OE growth, while increased demand for modifications, upgrades, provisioning, parts and repair drove aftermarket revenues. Adjusted operating profit increased 50% to $1.79 billion.
Pratt & Whitney’s sales rose 10% to $9.23 billion. Commercial aftermarket sales increased 21%, primarily driven by higher Geared Turbofan (GTF) engine volumes, while military revenues grew 2%. Commercial OE sales declined 5% due to a large commercial engine mix. Adjusted operating profit advanced 29% to $968 million, supported by higher commercial aftermarket volumes and approximately $160 million in IEEPA cost recovery. However, reported operating profit declined 19% to $608 million, reflecting a $363 million charge related to a customer bankruptcy.
Raytheon recorded sales of $8.03 billion, up 14% year over year. Growth reflected higher volumes across naval programs and land and air defense systems, including Patriot, Standard Missile and Tomahawk programs. Adjusted operating profit increased 32% to $1.13 billion, driven by improved net productivity, higher volumes and favorable mix, including Patriot programs.
RTX’s Financial Update
RTX had cash and cash equivalents of $9.17 billion as of Sept. 30, 2026 compared with $7.44 billion as of Dec. 31, 2025.
Long-term debt totaled $31.49 billion as of Sept. 30, 2026 compared with $34.29 billion as of Dec. 31, 2025.
Operating cash flow totaled $2.87 billion compared with $4.64 billion in the prior-year quarter. Capital expenditures were $749 million, resulting in free cash flow of $2.12 billion versus $4.03 billion a year earlier. The decline in quarterly cash flow reflected a comparison with the stronger prior-year period.
RTX Raises Its 2026 Financial Outlook
RTX raised its 2026 adjusted sales guidance to $97.0-$97.5 billion from $95.0-$96.0 billion. The company now expects organic sales growth of 10-11% compared with its prior projection of 8-9%.
Adjusted earnings are projected to be between $7.65 and $7.75 per share, up from $7.10-$7.25. Free cash flow is expected to range from $9.0 billion to $9.2 billion compared with the previous forecast of $8.50-$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
The Boeing Company BA is set to report third-quarter 2026 earnings on Oct. 27, 2026, before the market opens.
The Zacks Consensus Estimate for BA’s loss is pegged at 14 cents per share. The consensus estimate for its sales is pegged at $24.53 billion, indicating year-over-year growth of 5.4%.
Lockheed Martin LMT is set to report third-quarter 2026 earnings on Oct. 22, 2026, before market open.
The consensus estimate for LMT’s earnings is pegged at $7.49 per share. The consensus estimate for its sales is pegged at $20.43 billion, indicating year-over-year growth of 9.8%.
General Dynamics Corporation GD is set to report third-quarter 2026 results on Oct. 30, 2026, before the market opens.
The Zacks Consensus Estimate for GD’s earnings is pegged at $4.14 per share. The consensus estimate for its sales is pegged at $13.71 billion, indicating year-over-year growth of 6.2%.
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This article originally published on Zacks Investment Research (zacks.com).