RTX raises full-year 2026 outlook as third-quarter adjusted EPS rises 33% to $2.26

RTX Corporation (RTX) said Tuesday that third-quarter sales rose 11% from a year earlier to $25.0 billion, and it raised its full-year 2026 outlook for adjusted sales, adjusted EPS and free cash flow.

The company said in a Form 8-K filed Tuesday that the results appear in a press release furnished as Exhibit 99. The release is not deemed filed for purposes of the Securities Exchange Act of 1934.

Here's how the company did:

• Sales: $24,965 million vs. $22,478 million a year earlier
• GAAP diluted EPS: $1.89 vs. $1.41 a year earlier
• Adjusted EPS: $2.26 vs. $1.70 a year earlier
• Adjusted net income: $3,091 million vs. $2,311 million a year earlier
• Operating cash flow: $2,868 million vs. $4,639 million, down 38%
• Free cash flow: $2,119 million vs. $4,025 million, down 47%

Net income attributable to common shareowners was $2.6 billion in the quarter. That figure includes $0.3 billion of acquisition accounting adjustments and $0.2 billion of restructuring and other net items that the company excludes from its adjusted results.

Adjusted net income was $3.1 billion, up 34% from a year earlier. The company said adjusted segment operating profit rose $1.1 billion across all three segments, including $0.4 billion of IEEPA recovery, and that the growth was partly offset by higher taxes and lower pension income.

Adjusted EPS of $2.26 was up 33% from a year earlier and included $0.25 of IEEPA recovery. IEEPA stands for the International Emergency Economic Powers Act. The filing does not say what the recovery relates to or whether more is expected.

Operating cash flow fell 38% to $2,868 million, including about $0.3 billion from the IEEPA recovery. Capital expenditures were $0.7 billion, leaving free cash flow of $2.1 billion.

“Our strong execution and operational focus in the third quarter enabled RTX to deliver double-digit organic sales growth across commercial aerospace and defense,” said RTX Chairman and CEO Chris Calio.

“Demand for our products remains robust with over $81 billion of new commercial and defense awards, resulting in a record backlog of $340 billion.”

Full-year 2026 outlook

The company now expects adjusted sales of $97.0 billion to $97.5 billion for 2026, up from $95.0 billion to $96.0 billion. It expects organic sales growth of 10% to 11%, up from 8% to 9%.

Adjusted EPS is now forecast at $7.65 to $7.75, up from $7.10 to $7.25. Free cash flow is expected at $9.0 billion to $9.2 billion, up from $8.50 billion to $8.75 billion.

The company said a reconciliation of these forward figures to the closest GAAP measures is generally not available without unreasonable effort. It cited variability in items such as unusual gains and losses, the outcome of pending litigation, currency moves, and the timing of acquisitions and divestitures.

“Given our performance year to date, we are again raising our full year outlook for adjusted sales, adjusted EPS, and free cash flow,” Calio said. “We remain focused on increasing output, optimizing our cost structure, and investing in new technologies to support our customers and drive continued growth.”

Segment results

Collins Aerospace reported sales of $8,382 million, up 10% from $7,621 million a year earlier. Excluding divestitures, sales rose 12% organically, with commercial OE, or original equipment, sales up 23%, commercial aftermarket up 9% and defense up 7%.

Collins operating profit was $1,789 million, up 42%. Adjusted operating profit was $1,788 million, up 50% from $1,194 million, and included approximately $250 million of IEEPA recovery. Reported operating profit in the prior-year quarter included a gain on the sale of the actuation and flight control business.

Pratt & Whitney sales were $9,231 million, up 10%, driven by a 21% rise in commercial aftermarket sales, primarily GTF, and a 2% rise in military. Commercial OE fell 5%, which the company said reflected large commercial engine mix.

Reported operating profit at Pratt & Whitney fell 19% to $608 million after a charge of $363 million related to a customer bankruptcy. Adjusted operating profit rose 29% to $968 million, including approximately $160 million of IEEPA recovery.

Raytheon sales rose 14% to $8,031 million from $7,045 million, driven by higher volume on naval programs and land and air defense systems, including Patriot, Standard Missile and Tomahawk. Operating profit was $1,133 million, up 32%. Productivity included about $85 million of benefits tied to an international contract modification and a favorable adjustment related to an offset obligation.

Backlog and awards

Company backlog reached $340 billion, including $176 billion of commercial and $164 billion of defense work. The company said it received over $81 billion of new commercial and defense awards in the quarter.

In the third quarter RTX was awarded Tomahawk and AMRAAM multi-year undefinitized production contracts. An undefinitized contract is one whose final terms are still open. The filing does not give the value of those contracts.

Nine-month and balance sheet figures

For the nine months, sales were $71,749 million, up from $64,365 million a year earlier. Adjusted EPS was $5.93, up from $4.74, and free cash flow was $6,306 million, compared with $4,745 million.

At September 30, cash and cash equivalents were $9,173 million, up from $7,435 million at December 31, 2025. Long-term debt stood at $31,490 million, down from $34,288 million at year-end. Dividends paid in the quarter were $984 million, up from $910 million a year earlier.

The company had 2025 sales of more than $88 billion and more than 180,000 global employees. Its results conference call is set for Tuesday at 8:30 a.m. ET and will be webcast on its website.