RTX earnings analysis
What we found in RTX's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
RTX delivered strong Q2 growth, with revenue up 14.5% year over year to $24.708 billion, operating margin up 150 basis points to 11.4%, and GAAP diluted EPS up 28.7% to $1.57. Growth was broad-based across Collins, Pratt & Whitney, and Raytheon, while defense bookings of approximately $23 billion and total backlog of $289 billion support demand visibility. Liquidity improved materially through $5.402 billion of six-month operating cash flow, though the approximately $0.7 billion expected 2026 Powder Metal Matter cash impact, tariff uncertainty, and unfavorable $66 million Q2 EAC adjustments remain key constraints.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth and gross-margin expansion
- Q2 net sales rose $3.127 billion, or 14.5%, year over year to $24.708 billion from $21.581 billion. Gross margin expanded 50 basis points to 20.8% as cost of sales declined to 79.2% of sales from 79.7%.
- Profit and EPS increased sharply
- Operating profit increased $665 million, or 31.0%, to $2.811 billion, lifting operating margin 150 basis points to 11.4% from 9.9%. Diluted GAAP EPS grew $0.35 to $1.57 from $1.22.
- Broad-based segment sales growth
- All three segments expanded: Collins sales increased $588 million (8%) to $8.210 billion, Pratt & Whitney increased $1.258 billion (16%) to $8.889 billion, and Raytheon increased $1.268 billion (18%) to $8.269 billion.
- Pratt aftermarket and military momentum
- Pratt & Whitney operating profit rose 50% to $738 million and margin improved to 8.3% from 6.4%, supported by a $0.9 billion organic increase in commercial aftermarket sales and a $0.5 billion increase in military sales.
- Raytheon bookings and backlog accelerate
- Raytheon operating profit rose $237 million, or 29%, to $1.042 billion. Defense bookings more than doubled to $19.898 billion from $9.399 billion, while Raytheon backlog reached $86 billion versus $75 billion at December 31, 2025.
- Liquidity and operating cash flow strengthened
- Six-month operating cash flow increased to $5.402 billion from $1.763 billion, aided by favorable working-capital changes and $1.5 billion more cash from receivables factoring. Cash rose to $8.305 billion from $7.435 billion, while total debt declined $521 million to $37.383 billion.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Tariff refund timing and exposure uncertain
- RTX disclosed no material changes to the risk factors in its 2025 Form 10-K. However, it had paid approximately $0.5 billion of IEEPA tariffs and had recognized only an immaterial amount of refunds as of June 30, 2026; further refunds depend on approval amid a U.S. government appeal.
- GTF powder-metal cash burden remains
- Management estimates a full-year 2026 cash impact of approximately $0.7 billion from the Pratt & Whitney Powder Metal Matter, including customer credits and partner-recovery timing.
- Contract-estimate adjustments remain negative
- Net EAC adjustments remained unfavorable at $66 million in Q2 and $228 million for the first six months, demonstrating continuing program-estimate and execution sensitivity despite improvement from $117 million and $275 million unfavorable, respectively, a year earlier.
- Capital spending increased
- Investing cash outflow increased to $1.552 billion for the first six months from $1.187 billion, primarily reflecting $0.2 billion higher capital expenditures; this implies continued investment intensity even as operating cash flow improved.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.57
- Gross margin
- 20.8%
- Operating margin
- 11.4%
- Segment
- Collins Aerospace: revenue $8.210 billion; operating profit $1.306 billion; operating margin 15.9%
- Segment
- Pratt & Whitney: revenue $8.889 billion; operating profit $738 million; operating margin 8.3%
- Segment
- Raytheon: revenue $8.269 billion; operating profit $1.042 billion; operating margin 12.6%
What they said about what is next.
The 10-Q does not provide quantitative company guidance; management states it expects cash on hand and future operating cash flows to meet future operating cash needs and estimates a full-year 2026 Powder Metal Matter cash impact of approximately $0.7 billion.
The filing reads better than the one before it.
What came before.
- 10-Q · April 21, 2026
- RTX reported a strong quarter with net sales of $22,076 million, up $1,770 million (≈8.7%) versus $20,306 million a year ago, and operating profit of $2,555 million (up $520 million). Diluted EPS was $1.51 (up $0.37 vs…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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