RTX (NYSE:RTX) reported third-quarter 2026 adjusted sales of $25 billion, up 11% from a year earlier on an adjusted basis and 12% organically, as commercial original equipment, commercial aftermarket and defense businesses all posted growth.
Adjusted earnings per share rose 33% year over year to $2.26, while free cash flow totaled $2.1 billion. The company said earnings included $0.25 per share of recovery related to IEEPA costs. RTX ended the quarter with a record backlog of $340 billion, up 36% year over year and 18% sequentially.
“Our continued execution and operational focus enabled us to deliver another very strong quarter of results across RTX,” Chairman and Chief Executive Officer Chris Calio said on the company’s earnings call.
Defense awards drive backlog growth
Defense bookings were a major contributor to the quarter’s backlog increase. RTX booked nearly $59 billion of defense awards and reported a defense book-to-bill ratio of 4.57. The company cited roughly $23 billion in Tomahawk awards and more than $14 billion for AMRAAM after converting framework agreements into multiyear production contracts at Raytheon.
Calio also said RTX had signed multiyear contracts for SM-6 and SM-3 IB earlier in October. He described the contracts as significant revenue drivers for Raytheon over the coming decade, while noting the company is now focused on expanding capacity, securing supply and removing production bottlenecks.
Raytheon posted quarterly sales of $8 billion, up 14% year over year, supported by naval programs and land and air defense systems including Patriot, Standard Missile and Tomahawk. Adjusted operating profit rose $275 million to $1.1 billion, aided by improved productivity, higher volume and favorable program mix.
Raytheon recorded $52.3 billion in quarterly bookings, resulting in a 6.54 book-to-bill ratio and a $130 billion backlog. In addition to missile-related awards, the business cited a $3.1 billion British Army training systems award, $3 billion of classified awards and $1.8 billion for SPY-6 production.
Chief Financial Officer Neil Mitchill said the new munitions contracts will require capital expenditures and other investments over the next two to three years, but their funding structure is intended to preserve upfront free cash flow. Revenue will be recognized as costs are charged to the programs, with sales and profit contributions expected to build as production rates increase.
Calio said the contracts provide nearly a decade of demand visibility and could require production rates to rise by two to four times current levels. He said RTX added 150 new Raytheon suppliers during 2026 and is working with the Department of Defense on supply-chain capacity, test requirements, producibility and new supplier qualification.
Commercial aerospace growth continues
Commercial orders exceeded $22 billion during the quarter, rising more than 60% from a year earlier across original equipment and aftermarket channels. Pratt & Whitney announced GTF engine orders and commitments, including British Airways’ selection of GTF engines for up to 63 aircraft. RTX said it has received more than 800 GTF orders and commitments year to date and has a GTF backlog exceeding 8,000 engines.
Commercial aftermarket sales rose 16% organically in the quarter despite a slight year-over-year decline in global revenue passenger kilometers, according to Calio. He said maintenance, repair and overhaul demand remained strong and engine retirements were in line with company expectations.
Pratt & Whitney sales increased 10% to $9.2 billion, driven by a 21% increase in commercial aftermarket revenue, primarily from higher GTF maintenance volume. Commercial original-equipment sales declined 5% because of large commercial engine mix. Adjusted operating profit increased $217 million to $968 million.
Pratt’s PW1100 maintenance, repair and overhaul output rose more than 35% year over year in the quarter and more than 30% year to date. Calio said aircraft-on-ground levels were relatively stable sequentially because increased maintenance output offset engine removals associated with high summer fleet utilization. RTX continues to expect aircraft-on-ground reductions in the fourth quarter.
The company also said the first GTF Advantage-powered aircraft was delivered to United Airlines and entered service during October. RTX expects production to ramp next year and plans to begin incorporating its Hot Section+ upgrade package into maintenance visits early next year, pending final certification work.
Collins margin gains and investment plans
Collins Aerospace reported sales of $8.4 billion, up 10% on an adjusted basis and 12% organically. Commercial original-equipment sales, excluding divestitures, rose 23%, while commercial aftermarket sales increased 9% and defense sales rose 7%.
Adjusted operating profit at Collins increased $594 million to $1.8 billion. The business expanded margins by 560 basis points year over year, including approximately 300 basis points from IEEPA recovery. Mitchill said the quarter’s margin performance was “strong and very clean,” though fourth-quarter margins will reflect higher research and development, digital spending, increased original-equipment volume and other timing items.
RTX said Collins is pursuing structural cost actions including operational consolidation, shifting more manufacturing hours to best-cost locations and reducing overhead layers. The company said Collins has delivered double-digit organic sales growth year to date while reducing indirect labor headcount.
Across RTX, the company invested $2.8 billion in company- and customer-funded research and development and capital expenditures during the quarter. Investments included a $50 million expansion of Raytheon’s Forest, Mississippi, manufacturing facility, which will support Next Generation Jammer and other radar programs.
RTX raises 2026 outlook
RTX raised its full-year adjusted sales outlook to a range of $97 billion to $97.5 billion, from a prior range of $95 billion to $96 billion. The updated outlook implies organic sales growth of 10% to 11%, compared with the company’s prior forecast of 8% to 9% growth.
- Adjusted EPS: $7.65 to $7.75, up from prior guidance of $7.10 to $7.25.
- Free cash flow: $9 billion to $9.2 billion, up from $8.5 billion to $8.75 billion.
- Defense sales: Expected to grow at a low-double-digit rate, supported primarily by Raytheon.
- Commercial aftermarket: Expected to rise from low-double-digits to the low teens, reflecting higher GTF aftermarket volume.
Mitchill said the company expects another year of sales and earnings growth, improving operating margins and strong free cash flow in 2027, though RTX plans to provide detailed 2027 guidance during its fourth-quarter call in January.
About RTX (NYSE:RTX)
RTX Corporation (NYSE: RTX) is an aerospace and defense company that develops and manufactures products and systems for commercial aviation, business aviation, military aircraft and government customers. Its portfolio includes aircraft engines, avionics, flight-control systems, cabin interiors, communications equipment, air and missile defense systems, precision weapons, radars and advanced sensors.
The company operates through three principal businesses: Collins Aerospace, which supplies aerospace systems and components; Pratt & Whitney, which designs and produces aircraft engines and related services; and Raytheon, which provides defense and intelligence technologies.
