RTX Corp. (NYSE:RTX) shares traded lower Tuesday, even after the company reported stronger-than-expected results for the second quarter of fiscal 2025 and raised its full-year sales forecast.
The company posted net sales of $21.58 billion, a 9% increase from a year earlier, beating analyst estimates of $20.66 billion. Adjusted earnings per share rose 11% to $1.56, topping the consensus estimate of $1.45.
GAAP earnings came in at $1.22 per share, which included acquisition accounting adjustments and restructuring-related costs.
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Net income attributable to common shareowners was $1.7 billion. Adjusted net income climbed to $2.1 billion, up 12% from the year-ago period.
Operating cash flow for the quarter totaled $500 million, while free cash outflow came in at $100 million, impacted by a four-week work stoppage at the company’s Pratt & Whitney unit.
The company ended the quarter with a backlog of $236 billion, including $144 billion in commercial and $92 billion in defense. It returned $900 million to shareholders and raised its quarterly dividend by 8%.
RTX also announced a deal to sell Collins’ Simmonds Precision Products business for $765 million.
CEO Chris Calio highlighted broad-based strength, “We continued our momentum in the second quarter with organic sales and profit growth across all three segments, including 16% commercial aftermarket growth.” He added that major wins for geared turbofan engines and integrated air and missile defense programs helped drive the backlog to new highs.
Segment Highlights
- Collins Aerospace reported sales of $7.622 billion (+9% YoY), with adjusted operating profit up 9% to $1.25 billion. Higher commercial aftermarket and defense volumes, plus lower R&D spending, helped offset unfavorable commercial OE mix and tariff impacts.
- Pratt & Whitney delivered $7.63 billion in sales, up 12% year-over-year. Despite a reported operating profit drop (due to a $100 million charge from a customer bankruptcy), adjusted operating profit rose 13% to $608 million, driven by commercial aftermarket growth and favorable OE mix.
- Raytheon saw $7.00 billion in reported sales, up 8% year-over-year, with growth from Patriot, NASAMS, and naval programs. Adjusted operating profit rose 14% to $809 million, boosted by a favorable program mix and higher volumes.
Outlook
RTX raised its full-year adjusted sales guidance to $84.75 billion-$85.50 billion versus the consensus of $84.26 billion, up from a prior range of $83.0 billion-$84.0 billion.
It now expects 6–7% organic sales growth, versus 4-6% previously. The company lowered its full-year adjusted EPS guidance to $5.80-$5.95, down from $6.00-$6.15, versus the Street estimate of $5.95.
The company maintained its free cash flow outlook of $7.0 billion-$7.5 billion. Calio said the updated forecast reflects strong operational performance in the first half and incorporates the expected impact of tariffs and recent tax legislation. “We remain well positioned to drive long-term profitable growth,” he added.
Price Action: RTX shares are trading lower by 3.26% to $146.68 at last check Tuesday.
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