RTX raised its full-year outlook for the third straight quarter and also increased its 2026 targets for sales and free cash flow. Management now pegs adjusted earnings per share at 7.65 to 7.75 dollars for this year, versus earlier guidance that topped out at 7.25 dollars.
The update arrived with Tuesday's Q3 print, which topped expectations. Adjusted EPS was 2.26 dollars; 25 cents of that came from tariff refunds after the Supreme Court invalidated them earlier this year. At 9:33 a.m. in New York, shares were up 1.3%, and they were ahead 4.75% year to date through Monday.
A busy travel backdrop is feeding the company's commercial maintenance and repair shops, while higher defense spending in North America and Europe is lifting the military side. RTX, which builds jet engines for Airbus SE and Tomahawk cruise missiles, delivered double digit organic sales growth across all three major businesses in the quarter.
Profits followed. Adjusted operating profit jumped 50% at Collins Aerospace and climbed 29% at Pratt & Whitney. The latest numbers and a "strong" outlook are "a positive, but consistent with investor expectations," RBC Capital Markets analyst Ken Herbert wrote.
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RTX is leaning into surging munitions demand. Last quarter it signed multiyear contracts worth more than 40 billion dollars to scale up production of key missiles for the U.S. Defense Department, and this month it received a separate 24 billion dollar missile deal from the U.S. Navy. Those awards "represent a firm long-term demand signal, which is great for both us and our supply chain," Chief Financial Officer Neil Mitchill said. "It now gives all of us the confidence to invest and expand our production significantly."
At the White House, President Donald Trump has prioritized strengthening the defense industrial base as planners aim to replace thousands of missiles expended over months of conflict with Iran, prompting major Pentagon awards to RTX, Lockheed Martin, and others. U.S. officials are also pushing beyond traditional contractors to bring in commercial manufacturers. RTX held preliminary talks with General Motors this summer about boosting domestic production, Bloomberg reported in June, and it says it is qualifying more suppliers in Europe for priority missile parts.
The setup mixes resilient travel demand with contracted missile work. Pratt & Whitney is still working through its geared turbofan durability issue that at one point grounded hundreds of jets awaiting parts, and in July said the backlog should be cleared by year end. The bottom line: more visibility from long-dated defense awards plus improving shop throughput are the metrics to watch into 2026.
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