RTX raises 2026 outlook for a third straight quarter as backlog hits a record $340 billion

RTX reported third-quarter 2026 sales of $25.0 billion on Oct. 20, up 11% from a year earlier with 12% organic growth, and adjusted EPS of $2.26, up 33%. ZeroHedge, citing FactSet, put the consensus at $1.78. For the third straight quarter the company raised its full-year outlook: adjusted EPS to $7.65 to $7.75 from $7.10 to $7.25, adjusted sales to $97.0 billion to $97.5 billion from $95.0 billion to $96.0 billion, and free cash flow to $9.0 billion to $9.2 billion from $8.50 billion to $8.75 billion.

Demand is the headline. RTX booked more than $81 billion of commercial and defense awards, lifting backlog to a record $340 billion, up 36% from a year earlier and split $176 billion commercial and $164 billion defense. Raytheon sales rose 14% to $8.03 billion and its operating profit rose 32%; Yahoo Finance put Raytheon's own backlog at $130 billion, including $23 billion of Tomahawk and $14.3 billion of AMRAAM orders. The commercial side grew too, with Collins Aerospace and Pratt & Whitney sales each up 10%.

The beat is not all operational. Adjusted EPS includes $0.25 a share of IEEPA tariff cost recovery, and UBS analyst Gavin Parsons, as relayed by ZeroHedge, still saw a broad-based beat after adjusting for one-time items like that recovery. Pratt & Whitney's reported operating profit fell 19% after a $363 million charge tied to a customer bankruptcy, and quarterly free cash flow of $2,119 million was down 47% from a year earlier. Goldman Sachs analyst Noah Poponak described a solid quarter with guidance raised.

Northrop Grumman raised its 2026 EPS outlook the same morning, and Reuters framed the pair as part of a sector-wide round of higher forecasts on defense demand. The market treated them differently: RTX closed up about 0.6% at $193.34, per SentiSense market data, after trading between a 2.4% early gain reported by Reuters and a 1% decline by early afternoon, while NOC rose about 4.6%. What to watch: how much of the raised guidance holds once tariff recovery fades, Pratt & Whitney's commercial aftermarket, and congressional approval of the fiscal 2027 defense budget, which Yahoo Finance noted could shape part of the rearmament pipeline.