RTX raised its full-year outlook after third-quarter sales climbed 11% to $25.0 billion and company backlog reached a record $340 billion. The aerospace and defense group reported growth across Collins Aerospace, Pratt & Whitney and Raytheon, while stronger earnings were partly supported by tariff-related cost recoveries.
RTX backlog supports higher guidance
RTX said October 20 that new commercial and defense awards exceeded $81 billion in the quarter. The resulting backlog is almost evenly divided, with commercial orders representing about 52% and defense work about 48% of the total.
Source: RTX Q3 2026 earnings release, Oct. 20, 2026. Bars are scaled to the larger backlog component.
The official RTX earnings release increased the adjusted-sales forecast from $95.0–$96.0 billion. The midpoint of the new range is $97.25 billion. Management also lifted its organic-sales-growth view to 10%–11% from 8%–9%.
The backlog provides revenue visibility, but it is not the same as near-term sales. Delivery schedules, supply availability, customer funding and program execution determine how quickly awards convert into revenue. That distinction also applies to peers such as Northrop Grumman after its latest guidance update.
All three operating segments grew sales
Collins Aerospace sales increased 10% to $8.38 billion, driven by commercial original-equipment, aftermarket and defense demand. Adjusted operating profit rose 50% to $1.79 billion, with approximately $250 million of IEEPA-related recovery included in the quarter.
Pratt & Whitney sales rose 10% to $9.23 billion. Commercial aftermarket sales gained 21%, while commercial original-equipment sales declined 5%. Reported operating profit fell 19% after a $363 million customer-bankruptcy charge, but adjusted operating profit increased 29% to $968 million.
Raytheon posted the fastest segment sales growth, up 14% to $8.03 billion. RTX attributed the increase to higher volumes in naval programs and land and air defense systems, including Patriot, Standard Missile and Tomahawk. Operating profit rose 32% to $1.13 billion.
The mix of civil aviation and defense demand differentiates RTX from more concentrated contractors. Investors comparing aerospace production trends can also review GE Aerospace’s latest results.
Cash flow trails earnings growth
GAAP net income rose 35% to $2.58 billion, and GAAP EPS increased 34% to $1.89. Adjusted net income gained 34% to $3.09 billion. Adjusted EPS included $0.25 from recovery of costs associated with the International Emergency Economic Powers Act.
Cash conversion was weaker in the quarter. Operating cash flow fell 38% to $2.87 billion, and free cash flow declined 47% to $2.12 billion from a strong prior-year comparison. Even so, RTX raised full-year free-cash-flow guidance to $9.0–$9.2 billion from $8.5–$8.75 billion.
The results strengthen the earnings backdrop, but the next test is execution against the record order book. Investors will watch engine aftermarket volumes, defense production rates and whether tariff recoveries continue to support margins. For a separate industrial benchmark, Halliburton’s latest earnings report shows how backlog, pricing and cash conversion can diverge across cyclical sectors.
Image credit: Luka Slapnicar/Unsplash.
Sharron Kendi
Sharron Kendi is a seasoned crypto market analyst and writer with over three years of experience decoding blockchain trends, price movements, and market dynamics. She holds a Bachelor’s Degree in Commerce (Finance) from Kenyatta University, blending a solid academic foundation with a sharp eye for technical analysis and a deep understanding of on-chain data. Her work delivers clear, data-driven insights that empower investors to navigate the fast-evolving digital asset space with confidence.
