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RTX Q2 2025 · Earnings

RTX posted a strong second quarter for 2025, showcasing robust revenue growth, margin expansion, and sustained high demand across both commercial and defense markets, despite facing operational and macroeconomic challenges.

Total net sales rose 9% year-over-year to $21.6 billion, with organic sales growth also matching at 9%, signaling continued momentum across RTX’s portfolio. Net income surged to $1.66 billion, up sharply from the prior year’s $111 million, which was weighed down by legal charges. GAAP EPS improved to $1.22, while adjusted EPS rose 11% to $1.56. Operating performance was notably strong, with operating profit reaching $2.15 billion, a near fourfold increase from Q2 2024, and operating margin improving to 9.9% (from 2.7%). On an adjusted basis, segment operating margin climbed to 12.0%, up from 11.7%.

A key standout was RTX’s record $236 billion backlog, up 15% year-over-year, with a strong split of $144 billion in commercial aerospace and $92 billion in defense. However, free cash flow turned negative with a $72 million outflow, largely due to a four-week work stoppage at Pratt & Whitney and timing of duty drawback recoveries. Management reaffirmed full-year free cash flow guidance of $7.0–$7.5 billion, expecting normalization in the second half.

In the segment breakdown:

  • Collins Aerospace reported $7.62 billion in sales, up 9%, with operating profit rising 5% to $1.17 billion and a 15.4% margin. Growth was fueled by a 13% increase in commercial aftermarket sales and stronger defense volume.
  • Pratt & Whitney delivered $7.63 billion in sales, up 12%, with operating profit up 16% to $492 million, driven by a 28% jump in commercial aftermarket activity and higher military engine deliveries.
  • Raytheon posted $7.00 billion in revenue, an 8% gain, with operating profit rebounding to $805 million—a dramatic year-over-year increase due to a prior-year charge. On an adjusted basis, Raytheon’s operating profit grew 14%, with margin improving to 11.6%.

RTX continues to benefit from strong commercial aftermarket demand, which rose 16% overall in the quarter, and heightened defense activity, particularly in air and missile defense systems like Patriot, NASAMS, and LTAMDS. The company secured key awards across missile defense and geared turbofan engines, underscoring its strong competitive positioning.

Looking ahead, RTX raised its 2025 adjusted sales outlook to $84.75–$85.5 billion, up from $83.0–$84.0 billion, and increased organic growth expectations to 6–7%. However, due to the anticipated $850 million impact from tariffs and recent tax legislation, adjusted EPS guidance was revised down to $5.80–$5.95, from $6.00–$6.15. The quarterly dividend was raised by 8%, reflecting confidence in future cash generation.

Additional portfolio actions included the planned $765 million sale of Collins’ Simmonds Precision Products, advancing RTX’s ongoing portfolio optimization. The quarter also included $0.4 billion in acquisition accounting adjustments and $0.1 billion in restructuring charges, while the prior-year period was impacted by legal and contract-related charges. Notably, the effective tax rate dropped to 15.4%, a significant decline from the 59.1% rate in Q2 2024.

Overall, RTX delivered a strong operational performance in Q2 2025, underpinned by resilient end-market demand and strategic execution, while actively managing through external pressures including tariffs and supply chain dynamics.

July 22, 2025
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