Report date: Thursday, July 23, 2026, before market open | Call time: 7:30 a.m. ET | Fiscal period: 2026Q2
RTX will report FQ2 earnings on Thursday 7/23 before the US open, and sentiment is bullish on RTX due to favorable tailwinds in its defense and aerospace businesses, with a 'beat-and-raise' Q2 report mostly assumed. Consensus currently sits at Q2 revenue +6% to $22.88B with EPS +6.4% to $1.66. The catch: this optimism is reflected in a premium PE, with shares trading several turns richer than large-cap defense peers like LMT and NOC, which raises the bar for what qualifies as a "good" print.
Worth noting for context: RTX shares have had a volatile 2026 — the stock ran to a 52-week high near $212 in early March before selling off sharply following the Q1 print in late April (from roughly $196 the day before results to the low $170s within a week), despite that quarter itself being a clean beat-and-raise. That history is a reminder that with expectations already elevated, an "in-line" beat may not be enough to move the stock — investors should watch guidance cadence and margin quality as much as the headline EPS beat/miss.
RTX's first quarter set a high bar. Adjusted sales were $22.1 billion, up 10% organically, with growth across all 3 channels. Adjusted EPS of $1.78 was up 21% year-over-year, driven by 14% growth in segment operating profit. And free cash flow of $1.3 billion was a solid start to the year and up $500 million from Q1 last year. Order momentum was equally strong: book-to-bill in the quarter was 1.14, and our backlog is a record $271 billion, up 25% year-over-year with strong commercial and defense awards in the quarter.
Management raised guidance off that strength. RTX now guides to adjusted sales outlook by $500 million to a new range of $92.5 billion to $93.5 billion... driven by the performance we saw at Raytheon in the first quarter, with full-year adjusted EPS of between $6.70 and $6.90 for the full year, up from our prior range of $6.60 to $6.80, and free cash flow between $8.25 billion and $8.75 billion for the full year. The key question for Q2: does another strong quarter — particularly at Raytheon — trigger a third consecutive guidance raise?
Raytheon has been the standout segment, with Raytheon booked $6.6 billion of awards in the quarter, including over $600 million to supply the Netherlands with Patriot equipment and over $400 million from the U.S. Army for our Lower Tier Air and Missile Defense Sensors. Management flagged munitions output up over 40% year-over-year in Q1, and highlighted five landmark framework agreements with the Department of War covering critical munitions, including Tomahawk, AMRAAM and the Standard Missile family, which "once finalized... would provide firm demand signals for RTX and our suppliers to invest and ramp production well above existing rates over the next decade." Investors should listen for an update on whether these agreements have moved from negotiation to finalization, since as of Q1 management was still "going through the process to convert those into final agreements."
International demand keeps expanding the addressable market: in early July, RTX, through its Raytheon division, signed an agreement with NATO allies to expand the AMRAAM missile program, conducting feasibility studies to qualify new suppliers in Europe. Supply-chain capacity remains the swing factor — Raytheon has posted 12 consecutive quarters of material growth, which is great, and material receipts were up 13% year-over-year here in Q1, but management continues to watch rocket motors and microelectronics as constrained inputs.
The GTF powder-metal saga remains a swing factor for Pratt & Whitney margins. Q1 showed encouraging progress: PW1100 AOGs were down around 15% compared to the end of last year... the key enabler of this reduction is MRO output, which was up 23% year-over-year for the PW1100. The GTF Advantage — the source of the durability-focused "Hot Section Plus" retrofit — received aircraft certification... keeping us on track for entry into service later this year; watch for confirmation of on-schedule entry into service and early color on Advantage pricing/margin economics, which management has said will carry "a couple of hundred million dollars of headwind on OE margins throughout the course of the year" as new-engine deliveries continue running at negative margin while aftermarket profitability improves.
On aftermarket demand, management pushed back last quarter on fears that softer air-travel growth would hit shop visits, noting no changes to our by-channel outlooks at this point for commercial OE or aftermarket and citing the young age of the V2500 fleet (50% of it hasn't had a first or second shop visit) as a durable tailwind. Any commentary on Airbus delivery negotiations and widebody/narrowbody mix at Collins will also matter, especially given commentary elsewhere in the sector — Boeing's CEO has signaled the company is focused on stabilizing production (targeting 63/month on the 737 MAX and higher 787 rates), which is a read-through for Pratt/Collins OE volumes.
Tariffs remain a moving target. As of Q1, RTX said "really no change today to our outlook for tariffs for the P&L for the full year... about a $75 million year-over-year tailwind [mitigation]," while noting it had paid about $500 million associated with [IEEPA] tariffs that could eventually be refunded — a potential incremental EPS tailwind not yet baked into guidance. Segment margins have been expanding broadly (Collins +10bp, Pratt +70bp, Raytheon +150bp in Q1) despite tariff headwinds, driven by productivity and volume drop-through; sustaining that trend is central to the bull case.
Northrop Grumman's Q2 print (reported July 21) offers a cautionary data point for the sector: NOC reported Q2 EPS of $7.68, beating Street expectations of $6.83, with the beat largely driven by a lower tax rate of 6.3%, though segment operating margins contracted by 120 basis points to 10.6%, even as full-year guidance was raised for sales and backlog expanded significantly to $104.7B from $95.6B. This shows defense demand/backlog strength is broad-based, but also that margin quality (vs. tax-rate-driven beats) is under scrutiny — a dynamic likely to be applied to RTX's Raytheon segment as well. Separately, Lockheed's move to launch a lower-cost PAC-3 interceptor variant underscores continued urgency around munitions replenishment and cheaper air-defense — a market RTX's Coyote and Patriot franchises are also positioned in, alongside the NATO AMRAAM expansion noted above.
RTX heads into Q2 with strong underlying fundamentals — record backlog, double-digit organic growth, expanding margins, and a defense franchise riding historic global rearmament demand (Patriot, AMRAAM, Tomahawk, NASAMS) alongside a recovering, long-cycle commercial aerospace aftermarket. The setup is a "priced-for-perfection" one: consensus already assumes a beat, and the stock's premium valuation versus peers means execution quality (margin durability, tariff mitigation, GTF fleet recovery pace, and progress finalizing the multibillion-dollar munitions framework agreements) will likely matter more to the stock reaction than the headline EPS number itself.