RTX (NYSE:RTX) executives pointed to strong fourth-quarter and full-year 2025 results, citing sustained demand in both commercial aerospace and defense, a growing backlog, and continued progress on operational initiatives. Management also laid out 2026 guidance calling for continued sales growth, margin expansion, and higher free cash flow, while reaffirming that its geared turbofan (GTF) fleet management plan remains on track.
Fourth-quarter and full-year 2025 performance
Chairman and CEO Chris Calio said RTX delivered “strong sales, adjusted EPS, and free cash flow in the fourth quarter,” and characterized the company’s 2025 performance as being driven by “durable demand” and operational improvements enabled by its “core operating system.”
In the fourth quarter, CFO Neil Mitchill said adjusted sales were $24.2 billion, up 12% on an adjusted basis and 14% organically. Organic growth was driven by commercial OE (up 18%), commercial aftermarket (up 17%), and defense (up 10%). Adjusted segment operating profit rose 9% to $2.9 billion, while adjusted EPS was $1.55, up 1%, which Mitchill said reflected higher corporate expenses and a higher effective tax rate in the quarter.
On a GAAP basis, EPS from continuing operations was $1.19, including acquisition accounting adjustments and restructuring and other non-recurring items. Mitchill noted the quarter included a $0.15 settlement charge related to a pension transaction. Fourth-quarter free cash flow was $3.2 billion, contributing to the $7.9 billion full-year total, which included roughly $1 billion of powder-metal-related compensation and about $600 million of tariff impacts. RTX also paid down $1.1 billion of debt in the quarter and completed the divestiture of the Simmonds Precision Products business.
Backlog and orders highlight commercial and defense demand
Calio said RTX ended 2025 with a full-year book-to-bill of 1.56 and a record backlog of $268 billion, up 23% year-over-year. The company broke out roughly $161 billion of commercial orders and $107 billion of defense awards. Commercial backlog was up 29%, which management linked to higher aircraft production rates and resilient passenger travel. Calio said orders during 2025 included more than 1,500 GTF engines and over 2,400 Pratt & Whitney Canada engines.
On the defense side, Calio said the company’s book-to-bill was 1.31 for the year and highlighted significant fourth-quarter awards, including $1.2 billion to supply Spain with additional Patriot air and missile defense systems and a $1.2 billion contract for Tamir missile production to be executed at the company’s Camden, Arkansas facility. He also cited $2.2 billion in Pratt & Whitney military sustainment contracts, and a $438 million Collins contract from the FAA to deliver radar systems as part of the broader radar replacement program.
Raytheon booked $40 billion of awards during the year, Calio said, and its international backlog mix increased to 47% (up three points from the end of 2024). In the quarter, Raytheon bookings were $10.3 billion for a 1.35 book-to-bill and a record segment backlog of $75 billion, according to Investor Relations VP Nathan Ware.
Segment results: Collins, Pratt & Whitney, and Raytheon
- Collins: Fourth-quarter sales were $7.7 billion, up 3% adjusted and 8% organically, driven by commercial OE and aftermarket strength. Commercial OE sales were up 9%, and commercial aftermarket sales were up 13%, including a 24% increase in provisioning. Adjusted operating profit was $1.2 billion, up $16 million, as volume drop-through was partially offset by divestiture impacts and higher tariffs. For 2025, Collins posted $30.2 billion of adjusted sales and $4.9 billion of adjusted operating profit, with 9% organic sales growth and 30 basis points of margin expansion.
- Pratt & Whitney: Fourth-quarter sales rose 25% to $9.5 billion, driven by strength across all channels. Commercial OE sales increased 28% and commercial aftermarket rose 21%. Military engine sales increased 30%, reflecting higher F135 production and sustainment volume. Adjusted operating profit was $776 million, up $59 million, with headwinds including tariffs, higher SG&A, and the absence of a prior-year insurance recovery. For 2025, Pratt delivered $32.9 billion of adjusted sales and $2.7 billion of adjusted operating profit, representing 17% organic sales growth and 20 basis points of margin expansion.
- Raytheon: Fourth-quarter sales increased 7% to $7.7 billion on higher volume in land and air defense systems and naval programs. Adjusted operating profit rose $157 million to $885 million, driven by improved productivity, volume, and mix. For 2025, Raytheon generated $28 billion of adjusted sales and $3.2 billion of adjusted operating profit, with 6% organic growth and 130 basis points of margin expansion, including $157 million of improved net productivity.
2026 outlook: sales growth, cash generation, and margin expansion
Management guided 2026 adjusted sales to $92 billion to $93 billion, representing 5% to 6% organic growth. Mitchill said, adjusting for divestitures, RTX expects commercial OE and defense to grow mid-single digits, while commercial aftermarket is expected to rise high single digits.
RTX guided adjusted EPS of $6.60 to $6.80. Mitchill attributed the year-over-year improvement primarily to segment operating profit, expected to contribute roughly $0.59 at the midpoint, partially offset by lower pension income (a $0.13 headwind), a higher share count (a $0.05 headwind), and other items including higher minority interest (a $0.06 headwind). Lower interest expense from reduced average debt was expected to provide a $0.06 tailwind.
For free cash flow, RTX guided $8.25 billion to $8.75 billion. Mitchill said operational performance is expected to add about $1.1 billion, including a slight working capital tailwind from inventory initiatives. Powder-metal compensation is expected to be about $700 million in 2026, a roughly $300 million year-over-year tailwind versus 2025. Higher capital expenditures of about $500 million are expected to partially offset these tailwinds, with CapEx projected at $3.1 billion.
GTF fleet management progress and capacity investments
Calio said RTX’s “financial and technical outlooks remain on track” for the GTF fleet management plan. He noted PW1100 aircraft-on-ground (AOG) levels declined in the fourth quarter and were down more than 20% from 2025 highs. Management said MRO output increased 39% in the fourth quarter and 26% for the full year, even as heavier shop visits increased 40% in 2025. Calio said two additional shops—Sanad Group in the UAE and ITP Aero in Spain—joined the GTF MRO network, and RTX expects 2026 PW1100 MRO output growth in line with 2025.
RTX also highlighted ongoing investment in capacity and technology. Calio said the company invested more than $10 billion in 2025 across CapEx and company- and customer-funded R&D, including $2.6 billion of CapEx. For 2026, RTX plans $10.5 billion in combined CapEx and R&D, including $3.1 billion in CapEx. Investments were described across multiple sites, including Raytheon facilities in Tucson and Andover, Collins’ Richardson, Texas expansion, and Pratt capacity investments such as forging in Columbus, Georgia and an Asheville foundry project.
On product development, Calio said RTX received EU certification for the GTF Advantage engine in the fourth quarter and expects aircraft certification soon. The company has begun production cut-in, with entry into service expected later in 2026, along with certification and first installations of the Hot Section Plus upgrade package.
About RTX (NYSE:RTX)
RTX (NYSE: RTX) is a U.S.-based aerospace and defense company that designs, manufactures and services advanced systems for commercial, military and governmental customers worldwide. The company was created through the 2020 combination of Raytheon Company and United Technologies Corporation and later adopted the RTX name, positioning itself as a diversified provider across the aerospace and defense value chain.
RTX’s operations span a broad set of capabilities. Its commercial aerospace businesses include Pratt & Whitney aircraft engines and Collins Aerospace systems, which supply propulsion, avionics, aerostructures, interiors and integrated aircraft systems.
