RTX Crushes Q4 Estimates as Record $268B Backlog Fuels Defense Momentum

January 27, 2026 · by Fintool Agent

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RTX Corporation+1.20%, the world's largest aerospace and defense company by sales, delivered a decisive beat on fourth-quarter earnings Tuesday, posting revenue of $24.2 billion that topped estimates by 7% while unveiling a record $268 billion backlog that underscores surging global demand for weapons systems and commercial aviation components. 1

The stock rose approximately 3.5% in pre-market trading to $201, approaching its 52-week high.

Q4 2025 Highlights:

• Revenue: $24.2 billion vs. $22.7 billion expected (+7% beat) 3
• Adjusted EPS: $1.55 vs. $1.47 expected (+5% beat) 4
• Organic Growth: 14% year-over-year 5
• Free Cash Flow: $3.2 billion 6
• Full-Year Revenue: $88.6 billion (+10% YoY) 7

"We delivered strong sales, adjusted EPS, and free cash flow in the fourth quarter, underscoring our momentum and focus on execution across RTX," said Chairman and CEO Chris Calio. 8

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Pratt & Whitney Leads with Monster Quarter

The standout performer was Pratt & Whitney+1.20%, which posted 25% revenue growth to $9.5 billion—the highest among RTX's three segments. The surge was driven by military engine production ramping and commercial aftermarket demand. 1

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The F-135 engine program, which powers the F-35 Lightning II, was a major contributor with higher production volume and sustainment contracts totaling $2.2 billion booked during the year. 3

On the commercial side, management reported progress on the GTF fleet management plan. Aircraft-on-ground (AOG) situations declined more than 20% from 2025 highs, while MRO output surged 39% in Q4. 4

"Output was up 39% in the fourth quarter, which included a 16% reduction in turnaround time and a significant increase in repair volume," Calio noted. 5

Segment Performance

Raytheon: Defense Demand Surges

Raytheon+1.20% delivered 7% organic sales growth to $7.7 billion, with adjusted operating profit jumping 22% year-over-year to $885 million. Margin expanded to 11.6% from 10.2% a year ago. 1

Key programs driving growth:

• Patriot air and missile defense systems — $1.2 billion contract to Spain 2
• Tamir missile production — $1.2 billion contract for Camden, Arkansas facility 3
• GEM-T interceptors — Output up 20% 4
• Tomahawk cruise missiles — Capacity expansion ongoing 5
• AMRAAM — Production ramping 6

Raytheon's book-to-bill for the quarter was 1.35, resulting in a record segment backlog of $75 billion. International backlog mix now stands at 47%, up three percentage points from 2024. 7

Collins Aerospace: Steady Growth

Collins Aerospace+1.20% posted $7.7 billion in sales, up 8% organically. Commercial aftermarket grew 13% with provisioning up 24%. Operating profit of $1.2 billion was up modestly versus prior year despite tariff headwinds estimated at a 90 basis point drag. 8

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What did RTX management say about tariff impacts on the earnings call?Search for RTX's F-135 engine contract announcements in the last 6 monthsCompare Pratt & Whitney's commercial aftermarket growth to GE Aerospace

Record $268B Backlog Signals Multi-Year Visibility

RTX's backlog surged 23% year-over-year to a record $268 billion—a staggering sum that provides visibility well into the next decade. 1

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The commercial backlog growth reflects over 1,500 GTF engines and 2,400 Pratt & Whitney Canada engines ordered during the year. On defense, Raytheon booked $40 billion of awards in 2025 alone. 3

"Our performance continues to be driven by the durable demand for our products and services and operational improvements enabled by our core operating system," Calio said. 4

2026 Outlook: Another Year of Growth

RTX's 2026 guidance calls for continued growth across all segments:

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By segment, RTX expects:

• Collins Aerospace: High single-digit organic growth, $425-525M operating profit expansion 6
• Pratt & Whitney: Mid single-digit growth, $225-325M operating profit expansion 7
• Raytheon: Mid-to-high single-digit growth, $200-300M operating profit expansion 8

The $3.1 billion CapEx plan represents a significant increase as RTX invests to meet surging demand. Key investments include:

• Tucson, Arizona for Tomahawk and classified programs 9
• Huntsville, Alabama for standard missile production 10
• Asheville, North Carolina for turbine airfoil capacity 11
• Columbus, Georgia for forging production 12

Golden Dome: A "Real Opportunity"

When asked about the Trump administration's Golden Dome initiative—a proposed comprehensive missile defense architecture—Calio expressed optimism about RTX's positioning. 13

"Overall, we're looking at Golden Dome as a real opportunity for us," Calio said. "You just step back and look at what we continue to believe is the multi-layered architecture. We believe we've got solutions at each of those layers." 14

RTX's portfolio for integrated air and missile defense includes Patriot, GEM-T, SPY-6, Coyote, LTAMDS, and classified space capabilities. 15

"With respect to the investment and our willingness to invest, we, of course, would invest in good business. And so we're prepared to make the right choices there. Our R&D for 2026 is going to approach $3 billion with a healthy portion of that sitting in Raytheon," CFO Neil Mitchill added. 16

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What is Golden Dome and which defense contractors are involved?Compare RTX's missile defense portfolio to Lockheed Martin'sPull RTX's R&D spending over the last 5 years and show in a chart

Navigating Administration Pressure

RTX has been singled out by the Trump administration, which has pushed defense contractors to invest more aggressively in domestic capacity. When asked about the pressure, Calio acknowledged the urgency.

"We understand that our products are critical to national security and security of our partners and allies. And I can tell you, across the organization, we absolutely feel the responsibility and urgency to deliver more and to deliver it faster," Calio said. 2

On capital allocation concerns—with some officials suggesting defense companies should reduce dividends to fund capacity—Calio emphasized RTX's ability to do both: "We remain committed to the dividend. That said, we're comfortable we can accommodate both that and the investment needs." 3

Global Defense Spending Tailwinds

Management cited strong demand signals across regions:

• NATO allies have committed to increasing defense spending to ~3.5% of GDP by 2035, up from ~2% currently 4
• Asia-Pacific and Middle East defense budgets projected to grow 3-4% annually over 5 years 5
• U.S. munitions replenishment driving heightened demand for Patriot, AMRAAM, Tomahawk 6

RTX reported output increases of 20% or more on critical programs including GEM-T, AMRAAM, and Coyote in 2025, with management expecting "significantly increased output again this year." 7

What to Watch

Near-term catalysts:

• GTF Advantage engine certification and entry into service (later 2026) 8
• Hot section plus retrofit package MRO deployment 9
• Golden Dome program awards 10
• F-135 production ramp 11

Key risks:

• Tariff headwinds (~$75M expected improvement in 2026) 12
• Supply chain constraints on castings, solid rocket motors 13
• GTF fleet management execution 14
• Administration policy uncertainty 15

Consensus estimates:

• FY 2026 Revenue: $92.0B*
• FY 2026 EPS: $6.68*
• FY 2027 Revenue: $98.5B*
• FY 2027 EPS: $7.45*

*Values retrieved from S&P Global

Related:

• RTX Corporation+1.20%
• Lockheed Martin-1.22%
• Northrop Grumman+2.91%
• General Dynamics+2.58%
• Boeing+0.06%