RTX
IndustrialsRTX Corporation
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XBRL · SEC EDGAR2007–2025(19yr)| Metric | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $55.7B | $59.8B | $52.9B | $54.3B | $58.2B | $57.7B | $62.6B | $65.1B | $56.1B | $57.2B | $59.8B | $66.5B | $77.0B | $56.6B | $64.4B | $67.1B | $68.9B | $80.7B | $88.6B | +9.7% |
| Gross Profit | $24.8B | $26.9B | $24.0B | $25.4B | $27.2B | $26.6B | $28.6B | $29.1B | $26.3B | $26.9B | $28.8B | — | — | — | — | — | — | — | — | — |
| Gross Margin | 44.6% | 45.1% | 45.4% | 46.7% | 46.7% | 46.1% | 45.6% | 44.6% | 46.9% | 47.0% | 48.1% | — | — | — | — | — | — | — | — | — |
| Operating Income | $7.0B | $7.6B | $6.5B | $7.2B | $8.1B | $7.7B | $9.2B | $9.8B | $7.3B | $8.2B | $8.7B | $8.6B | $9.0B | -$1.9B | $5.0B | $5.4B | $3.6B | $6.5B | $9.3B | +42.2% |
| Operating Margin | 12.7% | 12.8% | 12.2% | 13.2% | 13.9% | 13.3% | 14.7% | 15.0% | 13.0% | 14.3% | 14.5% | 12.9% | 11.6% | -3.3% | 7.7% | 8.1% | 5.2% | 8.1% | 10.5% | +2.4pp |
| Net Income | $4.2B | $4.7B | $3.8B | $4.4B | $5.0B | $5.1B | $5.7B | $6.2B | $7.6B | $5.1B | $4.6B | $5.3B | $5.5B | -$3.5B | $3.9B | $5.2B | $3.2B | $4.8B | $6.7B | +41.0% |
| Net Margin | 7.6% | 7.8% | 7.2% | 8.0% | 8.6% | 8.9% | 9.1% | 9.6% | 13.6% | 8.8% | 7.6% | 7.9% | 7.2% | -6.2% | 6.0% | 7.7% | 4.6% | 5.9% | 7.6% | +1.7pp |
| Free Cash Flow | — | $4.9B | $4.5B | $5.0B | $5.6B | $5.2B | $5.8B | $5.6B | — | — | — | — | — | — | — | $4.9B | $5.5B | $4.5B | $7.9B | +75.1% |
| FCF Margin | — | 8.3% | 8.6% | 9.3% | 9.6% | 9.0% | 9.3% | 8.6% | — | — | — | — | — | — | — | 7.3% | 7.9% | 5.6% | 9.0% | +3.3pp |
| EPS (Diluted) | $4.27 | $4.90 | $4.12 | $4.74 | $5.49 | $5.66 | $6.25 | $6.82 | $8.61 | $6.12 | $5.70 | $6.50 | $6.41 | $-2.59 | $2.56 | $3.50 | $2.23 | $3.55 | $4.96 | +39.7% |
1. THE BIG PICTURE
RTX is currently a study in contradiction: it is capturing massive top-line momentum from a global rearmament cycle and a commercial travel surge, yet its bottom line is constrained by legacy industrial failures. While RTX Corporation’s diversified portfolio across Collins, Pratt & Whitney, and Raytheon provides a unique "prime contractor" advantage, the financial benefits of this scale are being diluted by the high costs of remediating the Geared Turbofan (GTF) engine fleet.
2. WHERE THE RISKS HIT HARDEST
RTX Corporation’s Aftermarket Scale, cited as a core competitive advantage (Business), is directly threatened by the Pratt & Whitney powder metal matter (Risks). While a global service network typically generates high-margin recurring revenue, this infrastructure is currently being consumed by accelerated inspections and customer support costs for the PW1100G-JM engines. Similarly, RTX’s status as a Prime Contractor on major defense programs is undermined by its Fixed-price development contracts. In an environment of inflation and labor shortages, these contracts shift the burden of cost overruns entirely to RTX, turning technological leadership into a margin drag (Risks).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a business growing faster than its long-term average but struggling with efficiency. Fourth-quarter sales grew 12%, outpacing the TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter growth of 9.7%, largely due to a 25% surge at Pratt & Whitney (8-K). However, this growth has not translated into peer-leading profitability. RTX’s operating margin of 10.3% ranks last among its primary peers, far behind Honeywell (17.4%) and GE (19.5%) (Peer Benchmarking). This discrepancy suggests that while RTX is winning volume, its "business mix"—specifically the heavy weight of military sales and engine remediation—is structurally less profitable than its peers' more commercial or diversified models.
Market sentiment appears steady despite these pressures. Short interest is low at 0.9% of the float, and RTX Corporation has maintained a 1.3% dividend yield, which sits in the middle of the peer group (Yahoo Finance). However, the buyback yield of 0.1% is the lowest among its peers, indicating that cash is being diverted to operations and debt management rather than being returned to shareholders (Peer Benchmarking).
4. IS IT WORTH IT AT THIS PRICE?
At a Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 27.6x, RTX is trading exactly in line with the peer median (Peer Benchmarking). The market is currently pricing in approximately 3.1% long-term growth (CAPM analysis). This valuation appears fair given that management is guiding for 5% to 6% organic sales growth in 2026 (8-K). However, RTX Corporation’s high net debt of $32.5B—the second-highest in the peer group—and its 8.0% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin suggest that the "quality" of this growth is lower than that of GE, which boasts a 14.7% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin. If growth were to slow to a GDP-pace of 2.5%, the justified multiple would drop to 23.6x, representing roughly 14% downside from current levels (CAPM analysis).
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if 2026 Free Cash Flow exceeds the high end of guidance ($8.75B), signaling that the powder metal remediation costs are being contained more effectively than anticipated.
- Cautious if the U.S. government enters a prolonged shutdown or operates under a continuing resolution, as RTX cites this as a primary risk to its defense contract funding and payment schedules (Risks).
- Cautious if operating margins remain stagnant at 10% while peers like Lockheed Martin or Northrop Grumman show expansion, indicating that RTX’s fixed-price contract challenges are structural rather than temporary.
6. BOTTOM LINE
Structural Advantage: A massive installed base of proprietary commercial engines and "prime" status on essential U.S. defense programs like the Patriot and AMRAAM systems. Bottom Line: RTX is a dominant aerospace player whose current valuation is fairly set, as its strong revenue growth is balanced by significant engine-related liabilities and inferior margins compared to its peers.
1. Top 5 Material Risks
- U.S. Government Budgetary Processes: Reliance on U.S. government defense contracts exposes RTX Corporation to risks from budget delays, government shutdowns, and continuing resolutions, which can cause stop-work orders, payment delays, and the loss of future program funding.
- Contractual Performance and Cost Control: Profitability is threatened by fixed-price development contracts where RTX Corporation bears the burden of cost overruns; unexpected technical challenges, inflation, or labor shortages can lead to cumulative adjustments and lower profit rates.
- Pratt & Whitney Powder Metal Matter: A rare condition in powder metal used in PW1100G-JM engines necessitates accelerated inspections of the GTF fleet, causing elevated aircraft-on-ground levels and significant ongoing costs for customer support and mitigation through 2026.
- International Geopolitical and Regulatory Exposure: A significant portion of sales are international, making the business sensitive to foreign government policies, trade sanctions (such as those from China), and export controls that can disrupt supply chains and restrict market access.
- Cybersecurity and IT Infrastructure: RTX Corporation faces evolving cyber-attacks targeting proprietary data and safety-critical systems; successful breaches could result in production downtimes, financial losses from remedial actions, and potential liability for compromised third-party data.
2. Company-Specific Risks
- Geared Turbofan (GTF) Ramp-up: The requirement to achieve mature production levels for the GTF engine family in a short timeframe creates operational strain, where any failure to meet delivery standards or durability expectations could trigger liquidated damages.
- Supply Chain Concentration: Dependence on single-source suppliers for critical components and raw materials—such as cobalt, rhenium, and titanium—leaves RTX Corporation vulnerable to production flow disruptions if those suppliers face financial or operational distress.
- Digital Transformation Initiatives: The multi-year effort to modernize operations through digital engineering and automation carries execution risk; failure to achieve these capabilities may result in the loss of revenue on government contracts that increasingly mandate digital requirements.
- Pension and Retirement Plan Volatility: Significant judgment in actuarial assumptions—specifically discount rates and expected returns on plan assets—means that market volatility can necessitate increased cash contributions, impacting liquidity.
3. Regulatory/Legal Risks
- Deferred Prosecution Agreements (DPAs): RTX Corporation is subject to two DPAs and an SEC Administrative Order related to historical Middle East contract payments and defective pricing claims; any breach of these agreements could lead to criminal prosecution, additional fines, or suspension from government contracting.
- Consent Agreement (CA) with the DOS: A three-year CA regarding alleged violations of the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR) requires an external compliance monitor and may restrict RTX Corporation's ability to execute divestitures on expected timelines.
- Environmental Liability: RTX Corporation is investigating and remediating contamination at various properties and faces "toxic tort" claims; violations of the Clean Air Act or Clean Water Act could result in facility-specific debarment from U.S. government contract work.
- Foreign Corrupt Practices Act (FCPA): As a global contractor, RTX Corporation is subject to anti-bribery laws; despite internal controls, RTX Corporation remains exposed to investigations regarding the conduct of its intermediaries and partners, which could result in disgorgement and reputational harm.
4. Financial Impact Map
U.S. Government Defense Spending → Consolidated Sales → Significant portion of revenue is derived from U.S. government programs subject to appropriation processes. Fixed-Price Contract Overruns → Operating Profit → Burden of costs exceeding target or ceiling prices directly reduces contract margins. Powder Metal Matter → Results of Operations → Significant incremental shop visits and customer support costs through 2026 impact financial performance. Debt Service Obligations → Cash Flow from Operations → Accelerated share repurchase (ASR) transactions shifted significant cash flow toward debt principal and interest payments. Goodwill and Intangible Assets → Assets → Impairment tests could lead to write-offs if the fair value of acquired businesses falls below carrying value.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 14A | Mar 2026 | — |
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Jan 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
RTX upgraded to Buy at Melius as 'Epic Fury' drives defense procurement surge
- ▸Melius Research upgraded RTX to Buy, price target raised to $242
- ▸Operation Epic Fury munitions replenishment estimated at $6B cost
- ▸Defense end market sales growth forecast at high-single-digits through 2028
- ▸Missile and defense systems account for 18% of total RTX sales
- ▸Production volumes for key missile programs expected to double or quadruple
CVU Q4 revenue $19.4M, FY25 net loss $0.8M amid A-10 program termination
- ▸Q4 revenue $19.4M vs $21.8M YoY
- ▸Q4 EPS $0.05 vs $0.08 YoY
- ▸FY25 net loss $0.8M vs $3.3M profit in 2024
- ▸FY25 revenue $69.3M vs $81.1M prior year
- ▸Year-end backlog $505M
RTX awarded $3.8 billion F-35 engine contract amid broader defense sector volatility
- ▸Awarded $3.8 billion contract for F-35 engine production
- ▸Defense sector stocks declining amid Iran war developments
- ▸Contract awarded by U.S. Navy
- ▸Broad market retreat observed across major defense contractors
RTX Pratt & Whitney awarded $6.6 billion F135 engine production contract for lots 18-19
- ▸$6.6 billion total contract value for F135 engine production
- ▸Contract covers lots 18-19 for F-35 Lightning II propulsion systems
- ▸Includes full-rate production engines, spares, modules, and engineering support
- ▸Production rates increased 20% over previous contract levels
- ▸Over $1 billion invested in production capacity over past five years
RTX Secures $2.01 Billion US Air Force Contract Modification for AEHF Satellite Systems
- ▸Secured $2.01 billion US Air Force contract modification for AEHF terminal systems
- ▸Total contract value increased to $2.97 billion from original $960 million
- ▸Operations to be conducted in Marlboro, Massachusetts, and Largo, Florida
- ▸Completed 26,000-square-foot expansion of Redstone Raytheon Missile Integration facility
- ▸Facility expansion follows $115 million investment, increasing capacity by over 50%
RTX Expands Redstone Missile Facility by 26,000 Sq Ft, Boosting Production Capacity Over 50%
- ▸Completed $115M expansion of Redstone Missile Integration Facility in Alabama
- ▸Integration and delivery capacity increased by over 50%
- ▸Facility supports production of nine Standard Missile variants and advanced weapons
- ▸Long-term munitions framework agreements secured with U.S. Department of War
- ▸Projected 2028 financials: $97.7B revenue and $8.9B earnings
RTX Q3 Revenue $22.48B Beats Estimates, Raises Full-Year Revenue Guidance to $87B
- ▸Q3 revenue $22.48B, beating analyst estimates of $21.31B
- ▸Q3 adjusted EPS $1.70, exceeding analyst estimates of $1.41
- ▸Raised FY revenue guidance to $86.5B–$87B from $84.75B–$85.5B
- ▸Shares rose 7.7% following Q3 earnings report release
- ▸Warned of potential $850M profit impact from 2025 tariffs
RTX Secures $11.74 Billion Contract Modification for SM-3 Missile Engineering and Support
- ▸Contract modification increases SM-3 missile support agreement value to $11.74 billion
- ▸Focuses on sustaining engineering and support for U.S. and allied forces
- ▸Developing Hypersonic Attack Cruise Missile (HACM) to address modern high-speed threats
- ▸RTX shares up 47.2% over past 12 months
- ▸Forward 12-month P/E ratio of 28.45X versus industry average 30.54X
RTX Q4 revenue $24.24B, up 12.1% YoY, beating analyst estimates by 7%
- ▸RTX Q4 revenue $24.24B, +12.1% YoY, beat estimates by 7%
- ▸RTX stock up 4.6% since earnings report, currently trading at $203.07
- ▸Leonardo DRS Q4 revenue $1.06B, +8.1% YoY, beat estimates by 7%
- ▸Leonardo DRS stock up 19.4% since earnings report
- ▸Defense sector Q4 revenues beat consensus estimates by 2.1%
RTX completes $115 million expansion of Alabama missile facility, increasing capacity 50%
- ▸$115 million capital investment completed at Redstone missile facility
- ▸Integration and delivery capacity increased by over 50%
- ▸Facility expansion adds 26,000 square feet of space
- ▸Total local workforce footprint exceeds 2,200 employees
- ▸Supports production of Standard Missile family and advanced weapon systems