RTX Corporation

RTX reported second-quarter adjusted sales of $24.7 billion, up 14% on an adjusted basis and 16% organically year over year. Adjusted segment operating profit was $3.2 billion, up 18%, and adjusted EPS was $1.89, up 21%; on a GAAP basis, EPS from continuing operations was $1.57 and included $0.27 of acquisition accounting adjustments and $0.05 of restructuring and other nonrecurring items. Free cash flow was $2.9 billion. By segment, Collins sales were $8.2 billion, Pratt & Whitney sales were $8.9 billion, and Raytheon sales were $8.3 billion. For the full year, RTX raised adjusted sales guidance to $95 billion-$96 billion, adjusted EPS guidance to $7.10-$7.25, and free cash flow guidance to $8.5 billion-$8.75 billion. The company now expects full-year organic sales growth of 8% to 9%.

Chris Calio said the quarter reflected strong execution across both commercial aerospace and defense, with record backlog, strong bookings, and continued demand for RTX products and services. He emphasized that commercial aftermarket remains resilient, defense demand is being reinforced by global events and budget support, and the company is investing to expand capacity and supply-chain resilience. His tone was confident and constructive, while repeatedly pointing to long-term demand and the need to convert framework agreements into definitive contracts.

Neil Mitchill highlighted that adjusted sales rose 16% organically, segment operating profit increased 18%, and margins expanded 40 basis points in the quarter. He said free cash flow of $2.9 billion benefited from higher segment profit, increased engine deliveries at Pratt, and advanced payments from international Raytheon customers, while powder metal-related compensation was about $150 million. On guidance, he raised sales, EPS, and free cash flow, noting the higher outlook is driven mainly by stronger defense performance and higher GTF aftermarket volume, partly offset by some working-capital headwinds and a need to build inventory for future growth.

Analysts pressed management on the framework agreements, the budget environment, and how a potential continuing resolution might affect the business. Calio said the U.S. base budget request crossing $1 trillion and bipartisan support for munitions are encouraging, but the framework agreements are still being converted into definitive contracts and are not yet in backlog. Questions also focused on Pratt’s OE mix and revenue cadence; management explained that OE sales were pressured by material allocation toward aftermarket/MRO needs, while strong aftermarket demand and deliveries to Airbus remain intact.