RTX Stock Jumps After Earnings. It Has ‘Great Momentum,’ Says CEO.

NEW YORK – Shares of aerospace and defense titan RTX (NYSE: RTX) surged more than 7% in early trading Tuesday after the company delivered quarterly results that surpassed Wall Street expectations and raised its full-year financial forecast. CEO Greg Hayes credited the performance to "great momentum" across its portfolio, citing soaring demand in its defense businesses and a robust, sustained recovery in commercial air travel that is fueling its aviation segments. The strong report provides a clear signal that the company is successfully navigating both immense opportunities and persistent operational challenges.

RTX Surpasses Expectations, Raises Outlook

RTX reported impressive top- and bottom-line figures for the fiscal quarter, providing a jolt of confidence to investors who have been closely watching the interplay between geopolitical tailwinds and specific headwinds within its Pratt & Whitney engine division. The beat was driven by exceptional strength at its Raytheon defense unit and continued high-margin aftermarket growth at Collins Aerospace.

The company’s leadership translated this quarterly outperformance into an upgraded forecast for the full year, signaling confidence in its ability to execute on a record backlog and manage ongoing industry pressures.

• Revenue Beat: The company posted quarterly revenue of $20.1 billion, comfortably ahead of the analyst consensus of $19.5 billion. This represents a 12% year-over-year increase, underscoring broad-based demand.
• Earnings Surprise: Adjusted earnings per share (EPS) came in at $1.35, significantly outperforming the Wall Street estimate of $1.25. The figure highlights strong operational execution and margin management.
• Upgraded Guidance: RTX raised its full-year revenue forecast to a range of $79 billion to $80 billion, up from a previous $78 billion to $79 billion. It also increased its adjusted EPS guidance to a new range of $5.30 to $5.40, up from $5.20 to $5.30.
• Stock Reaction: The stock immediately reacted to the positive news, climbing over 7.5% to $108.50 in pre-market trading, positioning it for its best single-day performance in over a year.

CEO Touts ‘Great Momentum’ Amid Dual Tailwinds

During the subsequent investor call, Chairman and CEO Greg Hayes emphasized that RTX is firing on nearly all cylinders, benefiting from two powerful, concurrent market trends: a heightened global threat environment and the normalization of post-pandemic air travel.

“This quarter’s results demonstrate the great momentum we are building across RTX,” Hayes stated. “We are seeing unprecedented demand for our advanced defense solutions at Raytheon, driven by the current geopolitical landscape. Simultaneously, the commercial aerospace recovery continues at a rapid pace, boosting orders and, most importantly, high-margin aftermarket services at both Collins and Pratt & Whitney.”

• Defense Demand: Hayes highlighted a record backlog in the Raytheon segment, now standing at over $75 billion. He noted that orders for missile defense systems, including the Patriot and advanced medium-range air-to-air missiles (AMRAAM), have accelerated as nations seek to replenish stockpiles and modernize their capabilities.
• Commercial Aerospace Recovery: The CEO pointed to global airline flight hours, which are now consistently exceeding 2019 levels in most regions. This directly translates into revenue for RTX through parts, repairs, and long-term service agreements for the thousands of aircraft powered by its engines and equipped with its components.

A Closer Look at Business Unit Performance

While the headline numbers were strong, a deeper dive into RTX’s three core segments reveals a more nuanced picture of where the company is excelling and where it faces challenges.

Collins Aerospace: Flying High on Travel Rebound

The Collins Aerospace division was a standout performer, posting a 15% increase in sales. The growth was primarily driven by its aftermarket business, which saw a surge of over 20% as airlines invested heavily in maintaining their active fleets. Sales of original equipment (OE) for new aircraft also remained strong, supported by production rate increases at Boeing and Airbus.

Raytheon: A Beneficiary of Geopolitical Tensions

The Raytheon defense segment reported a 14% rise in revenue, handily beating expectations. The unit booked over $10 billion in new orders during the quarter, reflecting urgent demand from the U.S. Department of Defense and international allies. Management noted particular strength in integrated air and missile defense, advanced sensors, and next-generation weapons systems.

Pratt & Whitney: A Story of Growth and Challenges

Pratt & Whitney presented a mixed but ultimately positive story. The engine maker saw revenue climb 11%, powered by strong demand for both new engines and aftermarket services. However, the segment’s profitability was tempered by ongoing issues related to its Geared Turbofan (GTF) engines. The company is in the midst of a multi-year inspection and repair program for a powder metal defect affecting a portion of the GTF fleet. While RTX has quantified the financial impact and reaffirmed it is manageable, it remains a significant operational headwind that requires careful execution.

Navigating Headwinds and Seizing Opportunities

Looking ahead, RTX’s narrative is a balance of capitalizing on historic demand while meticulously managing complex internal and external pressures. The upgraded guidance suggests management believes the positive momentum will more than offset the known difficulties.

• Key Catalyst: The company’s combined backlog, now exceeding $200 billion, provides exceptional revenue visibility for years to come. This backlog is split almost evenly between defense and commercial aerospace, giving RTX a uniquely balanced portfolio.
• Persistent Challenge: The Pratt & Whitney GTF engine inspections will remain a primary focus for investors. The key will be the company’s ability to execute the required shop visits on schedule and within its projected budget, minimizing further disruption to its airline customers.
• Market Context: Like its peers, RTX continues to navigate a tight labor market and lingering supply chain bottlenecks. While the company noted improvements, these factors still constrain production rates and put pressure on margins.

What's Next for RTX Investors

Tuesday’s blockbuster report has reset the narrative for RTX. The focus for investors will now shift from questioning the company’s direction to monitoring its execution. The core investment thesis—that RTX is a prime beneficiary of long-term growth trends in both defense and commercial aviation—has been emphatically reaffirmed.

The path forward is clear: RTX must deliver on its massive defense backlog, efficiently manage the GTF engine issue to restore full confidence in the Pratt & Whitney franchise, and continue to capitalize on the lucrative aerospace aftermarket. With its stock breaking out to multi-year highs, the market has signaled its belief that RTX has the momentum to do just that.