RTX raised its 2026 financial outlook after reporting double-digit third-quarter growth and a record backlog of $340 billion, reflecting strong demand across commercial aerospace and defense. The company said quarterly sales rose 11% from a year earlier to $25.0 billion, while adjusted earnings per share increased 33% to $2.26.
Backlog is now larger than three years of current sales
RTX ended the quarter with $176 billion of commercial backlog and $164 billion of defense backlog. The total reached $340 billion after more than $81 billion in new awards during the period.
That gives the company unusually strong revenue visibility, although converting orders into sales will depend on supply chains and production capacity.
Full-year guidance moved higher
RTX now expects adjusted sales of $97.0 billion to $97.5 billion, up from its previous range of $95.0 billion to $96.0 billion. Adjusted earnings per share are projected at $7.65 to $7.75, compared with the earlier $7.10 to $7.25 forecast.
Free cash flow guidance was also raised to $9.0 billion-$9.2 billion.
Commercial aerospace remains a major growth engine
Collins Aerospace revenue rose 10%, helped by a 23% increase in commercial original-equipment sales. Pratt & Whitney revenue also grew 10%, with commercial aftermarket sales up 21%.
Airlines are spending heavily on maintenance as fleets age and passenger demand remains strong, supporting parts and service revenue.
Defense demand is rising at the same time
Raytheon sales increased 14%, supported by air- and missile-defense programs. Governments are rebuilding inventories and investing in systems including Patriot, Tomahawk and AMRAAM.
The combination of commercial and military demand gives RTX two large end markets growing simultaneously.
Supply chains remain the main execution risk
A record backlog is only valuable if factories can deliver. Aerospace suppliers continue to face shortages in castings, electronics and specialized labor.
RTX has been investing in production capacity and supplier support to increase output, but bottlenecks can still delay cash conversion.
Pratt & Whitney’s engine issues are still part of the story
The company continues to manage the long-running inspection and maintenance program affecting certain geared turbofan engines. That program has created costs and operational disruption for airline customers.
Stronger aftermarket demand helps revenue, but investors will continue to watch the pace and expense of remediation.
Defense spending provides long-term visibility
Military budgets in the U.S., Europe and Asia have expanded as governments respond to wars and geopolitical tensions. Missile defense in particular has become a priority.
That demand is reflected in multiyear production contracts that can support factory utilization for years.
Cash flow matters as much as earnings
Aerospace and defense companies can report strong accounting profit while consuming cash if inventory and receivables rise. RTX’s higher free-cash-flow forecast therefore provides an important signal that management expects operating performance to translate into liquidity.
That cash can fund dividends, buybacks, debt reduction and additional investment.
The backlog also creates execution pressure
Large order books can become liabilities if inflation, labor shortages or fixed-price contract terms compress margins. RTX must increase output without sacrificing profitability.
Investors will watch whether the company can preserve margin expansion as deliveries accelerate.
2026 is becoming a record year for the portfolio
RTX’s latest guidance suggests the company is benefiting from one of the strongest demand environments in its history. Commercial aviation recovery and defense rearmament are reinforcing each other rather than offsetting one another.
The next challenge is operational: turning a $340 billion backlog into reliable deliveries and cash while managing engine remediation and supplier constraints.
Sources
- RTX Q3 2026 results, Oct. 20, 2026
- Reuters, Oct. 20, 2026
Missile inventories are a long-term demand driver
Recent conflicts have exposed how quickly guided-missile inventories can be depleted. Governments are responding with larger multiyear procurement programs designed to give suppliers confidence to expand factories and hire workers.
For RTX, those programs can improve production efficiency because factories have more predictable volumes, but they also require major upfront investment in tooling and supplier capacity.
Commercial and defense cycles are unusually aligned
Aerospace companies often benefit from one market while the other weakens. The current period is different: airlines need more maintenance and equipment at the same time governments are raising defense spending.
That alignment supports stronger revenue growth, but it also intensifies competition for skilled labor, engines, electronics and specialized materials.
