RTX Highlights $289B Backlog as Aerospace, Defense Demand Powers Growth

Key Points

• RTX reported a $289 billion backlog, up 22% year over year, supported by sustained commercial aviation and defense demand. First-half results included 13% organic sales growth, 21% adjusted EPS growth and approximately $4 billion in free cash flow.
• Commercial aerospace remains resilient, with rising aircraft production and strong aftermarket potential. Pratt & Whitney increased GTF maintenance output by 30% in the first half, while aircraft-on-ground levels fell 25% from year-end.
• Raytheon is benefiting from robust air-defense and munitions demand, with a 1.77 book-to-bill ratio and critical munitions production doubling in the first half. RTX’s backlog excludes a recently signed seven-year, $23 billion Tomahawk contract and additional munitions framework agreements.

RTX NYSE: RTX Chairman, President and CEO Chris Calio said the aerospace and defense company remains positioned to benefit from sustained commercial aviation and defense demand, citing a $289 billion backlog that was up 22% from a year earlier.

Speaking at a Morgan Stanley aerospace and defense conference, Calio said demand across RTX’s Pratt & Whitney, Collins Aerospace and Raytheon businesses is “real” and “enduring.” He said the company’s focus is on converting that demand into revenue through operational execution, supply-chain investments and technology development.

Calio said RTX generated 13% organic sales growth, 21% year-over-year adjusted earnings-per-share growth and approximately $4 billion in free cash flow during the first half of the year. He also said the company had no change to its full-year outlook, though it has begun to see IEEPA refunds flow through in the third quarter and expects to provide an update later.

Commercial aerospace demand remains resilient

Calio pointed to continued demand for air travel and more fuel-efficient aircraft as key long-term drivers. Boeing and Airbus have a combined backlog of about 15,000 aircraft, he said, while industry projections call for more than 20,000 to 30,000 new aircraft over the next decade to decade and a half.

RTX expects aircraft production rates to continue rising, according to Calio. He said Collins Aerospace has capacity to support higher build rates and that Pratt & Whitney is expected to deliver a record number of geared turbofan, or GTF, engines this year.

On the commercial aftermarket, Calio said airline customer buying behavior has not changed significantly despite price volatility and higher jet-fuel costs. He said the GTF engine fleet has become larger than the V2500 fleet, supporting a growing base of future maintenance activity.

Calio also highlighted the long maintenance runway for Pratt & Whitney Canada and the V2500 fleet. About 60% of Pratt & Whitney Canada’s installed base has not yet received a first overhaul, he said. For the V2500, 15% of engines have not had a first shop visit and roughly half have not had a second shop visit.

At Collins, RTX estimates it has about $105 billion of out-of-warranty equipment currently flying. Calio said Collins has greater content on new aircraft platforms than on legacy platforms and derives about 40% of sales from commercial aftermarket activity.

GTF maintenance output and turnaround times improve

Pratt & Whitney’s GTF maintenance, repair and overhaul output increased 30% year over year in the first half, Calio said. In the second quarter, MRO output was up 40% from a year earlier, helping reduce aircraft-on-ground, or AOG, levels by 25% from the end of last year.

RTX is prioritizing material availability for MRO shops to support the fleet, Calio said. The company has added about seven GTF MRO shops over the past three years, and those additions have reduced heavy-shop-visit turnaround times by nearly 20%, according to Calio.

He said the certified GTF Advantage engine will offer twice the time on wing of the base program, full-life limited-life parts, increased thrust and sustainable aviation fuel compatibility. The GTF Advantage is interchangeable with non-Advantage engines, he said. Pratt & Whitney is also certifying an HS+ derivative, which Calio said is expected to begin entering shop visits next year.

Raytheon sees broad air-defense and munitions opportunity

Calio described Raytheon as a central supplier to integrated air and missile defense architectures, noting that sensors and effectors account for about 70% of the business’s sales. He said RTX has systems and products spanning counter-unmanned aircraft systems, NASAMS, Patriot, LTAMDS radar, naval radars and the Standard Missile family.

Raytheon’s 12-month rolling book-to-bill ratio was 1.77 at the end of the second quarter, Calio said. Critical munitions output doubled in the first half, while 48% of Raytheon backlog was international, up four percentage points from a year ago.

The company’s $289 billion backlog does not include five framework agreements for critical munitions or a recently executed seven-year, $23 billion Tomahawk contract, Calio said. He said the framework agreements could drive volumes for the covered munitions to between two and four times current levels.

According to Calio, longer-term government agreements give RTX and its suppliers greater confidence to invest in facilities, equipment and hiring. About half of RTX’s supply chain consists of small or medium-sized businesses, he said, making long-term demand visibility particularly important.

Calio said the company expects high-end, battle-proven systems to remain in demand while also pursuing lower-cost capabilities, including the Coyote counter-UAS system, directed-energy solutions and a “composable weapons” approach using proven components to shorten development cycles.

Investment, margins and capital allocation

RTX plans to invest about $10.5 billion this year in company- and customer-funded research and development and capital expenditures. Calio said the investments will support production capacity, automation, connected-machine data systems and supply-chain visibility.

For Collins Aerospace, Calio placed a 19% to 20% margin target in the medium term. He identified commercial aftermarket strength, higher original-equipment volumes and structural cost reductions as the principal drivers.

Calio declined to provide a specific 2027 free-cash-flow estimate, but said RTX’s business fundamentals support free cash flow equivalent to 90% to 100% of adjusted net income. The midpoint of RTX’s current 2026 free-cash-flow outlook is $8.6 billion, according to the discussion.

On capital allocation, Calio said RTX’s priorities remain investing in the business, reducing debt, and maintaining its dividend. He said RTX expects to return to pre-accelerated-share-repurchase debt levels by the end of the year.

About RTX (NYSE:RTX)

RTX Corporation NYSE: RTX is an aerospace and defense company that develops and manufactures systems, products and services for commercial aviation, business aviation and government customers. Its offerings include aircraft engines, avionics, flight-control systems, cabin interiors, communications equipment, radar, air and missile defense systems, precision weapons and cybersecurity solutions.

The company operates through three principal businesses: Collins Aerospace, which provides aerospace systems and components; Pratt & Whitney, which designs and manufactures aircraft engines and provides related maintenance services; and Raytheon, which develops integrated defense systems, sensors, missiles and other mission technologies.

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