RTX Corp. (RTX (RTX)) shares climbed in premarket trading Thursday after the aerospace and defense giant delivered second-quarter results that blew past expectations and raised its full-year outlook. The company is riding a wave of demand that shows no signs of slowing, with a record backlog and robust performance across its commercial and defense businesses.
Adjusted earnings came in at $1.89 per share, easily topping the $1.66 analysts were looking for. Sales hit $24.71 billion, up 14% from a year ago and well above the $22.89 billion consensus. Organic sales grew even faster, at 16%. GAAP earnings per share rose 29% to $1.57, while net income climbed 29% to $2.14 billion. Adjusted net income increased 22% to $2.58 billion.
The quarter included some one-time items: acquisition accounting adjustments that shaved 27 cents per share off earnings, restructuring charges of 5 cents per share, and a $69 million pretax litigation charge. But even with those headwinds, the underlying business momentum was undeniable.
Cash flow was also strong. Operating cash flow totaled $3.55 billion, and free cash flow reached $2.88 billion after $669 million in capital expenditures. RTX ended the quarter with $8.31 billion in cash and cash equivalents, though long-term debt stood at $31.86 billion, with $5.30 billion due within a year.
The $289 Billion Backlog
Perhaps the most telling number in the report is the backlog: $289 billion, up 22% from a year ago. That includes $170 billion in commercial orders and $119 billion in defense orders. It's a clear signal that customers—both airlines and governments—are locking in long-term commitments. The company also agreed to sell Raytheon's Blue Canyon Technologies business for $620 million, a move that streamlines its portfolio.
Segment Strength Across the Board
Every major segment contributed to the beat. Collins Aerospace reported sales of $8.21 billion, up 8% year over year (13% organically). Commercial original equipment sales jumped 26%, commercial aftermarket sales rose 10%, and defense sales grew 7%. Adjusted operating profit increased 10% to $1.37 billion, with margin expanding to 16.7%.
Pratt & Whitney posted sales of $8.89 billion, up 16%. Commercial aftermarket sales climbed 25%, and military sales rose 23%, though commercial original equipment sales dipped 8%. Adjusted operating profit increased 22% to $740 million.
Raytheon generated sales of $8.27 billion, up 18%, fueled by demand for land and air defense systems, naval programs, and air and space defense systems—including Patriot, Standard Missile, and AMRAAM. Adjusted operating profit rose 29% to $1.04 billion, lifting margin to 12.6%.
Guidance Gets a Boost
RTX raised its full-year adjusted earnings forecast to a range of $7.10 to $7.25 per share, up from $6.70 to $6.90. That's above the $6.92 analysts had expected. The company also lifted its sales forecast to $95 billion to $96 billion, from $92.5 billion to $93.5 billion, versus the $94.09 billion consensus. Organic sales growth is now expected at 8% to 9%, up from the prior 5% to 6%.
Free cash flow guidance was raised to $8.50 billion to $8.75 billion, from $8.25 billion to $8.75 billion. It's a confident outlook from a company that's clearly benefiting from strong demand in both commercial aviation and defense spending.
RTX shares were up 4.83% at $204.30 in premarket trading Thursday. The market is rewarding a company that not only beat expectations but also raised the bar for the rest of the year.
