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RTX reported Q3 FY2026 revenue of $25.0 billion, above the $24.0 billion consensus, and adjusted earnings per share of $2.26, above the $1.78 consensus. Revenue rose from $22.5 billion a year earlier, while diluted EPS rose to $1.89 from $1.41.
The filing attributed the quarter’s organic sales growth to increases across Raytheon, Collins and Pratt & Whitney. At Pratt, higher commercial aftermarket volume drove growth, although commercial original-equipment sales fell because of the mix of large engine deliveries. Raytheon’s growth included higher sales from naval power and Patriot programs.
RTX reported gross margin of 23.3%, up from 20.4%, and operating margin of 13.4%, up from 11.2%. The filing said operating profit benefited from tariff refunds and investment gains, partly offset by a $0.4 billion Pratt & Whitney charge related to a customer bankruptcy. RTX reported quarterly free cash flow of $2.0 billion, down from $3.9 billion a year earlier.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $25.0 billion | $22.5 billion | 11.1% |
| Diluted EPS | $1.89 | $1.41 | 34.0% |
| Gross margin | 23.3% | 20.4% | 2.9 percentage points |
| Operating margin | 13.4% | 11.2% | 2.1 percentage points |
| Free cash flow | $2.0 billion | $3.9 billion | −47.6% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $2.26 | $1.78 | Beat by 27.0% |
| Revenue | $25.0 billion | $24.0 billion | Beat by 3.96% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
CEO Chris Calio said RTX ended Q3 with a $340 billion backlog, as defense awards and commercial orders added to work the company has yet to deliver. He said commercial aftermarket sales grew 16% organically in the quarter, despite a slight decline in global passenger traffic, and engine retirements remained in line with expectations.
On defense, Calio said Raytheon had converted munitions framework agreements into binding contracts with about $70 billion in combined value. Asked about increasing production rates, he said the company was lining up suppliers, ordering tooling and test equipment, and working with the Department of War on testing and supplier qualification. Calio described the immediate task as “removing any and all bottlenecks so we can get to these higher rates.” The filing says funding for the munitions contracts is subject to annual congressional appropriations.
At Pratt & Whitney, Calio said PW1100 maintenance, repair and overhaul output rose over 35% year-over-year in Q3. He expects fewer aircraft on ground in Q4 and said the GTF Advantage engine had entered service. Calio also said RTX was progressing certification of the Hot Section Plus upgrade, with installation during maintenance visits expected to begin early next year.
Asked about cash flow, CFO Neil Mitchill said declining powdered-metal payments could provide about a $500 million tailwind in 2027, while tariff refunds and pension items would work in the opposite direction. He also said RTX would watch working-capital needs as it delivers its backlog. Regarding Pratt, Mitchill said more paying GTF shop visits should contribute to cash flow over the next three years, but declined to quantify the contribution.
On Collins margins, Mitchill said Q4 would include higher research and development and digital spending, while the tariff refunds received in Q3 would not repeat. He expects Collins’ operational margins to expand in 2027.
Guidance
RTX raised its FY2026 adjusted sales outlook to $97.0 billion to $97.5 billion from $95 to $96 billion, and adjusted EPS to $7.65 to $7.75 from $7.10 to $7.25. It also raised its free cash flow outlook to $9.0 billion to $9.2 billion from $8.5 to $8.75 billion.
CFO Neil Mitchill said RTX now expects organic sales growth of between 10 and 11%, up from between 8 and 9%. He also raised the company’s growth expectations for commercial original equipment, commercial aftermarket and defense sales.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Free cash flow, non-GAAP | FY2026 | $9.0 billion–$9.2 billion | — | New |
| EPS, non-GAAP | FY2026 | $7.65–$7.75 | — | New |
| Revenue, non-GAAP | FY2026 | $97.0 billion–$97.5 billion | — | New |
| Operating margin, Collins | FY2027 | Collins expects operational margins to expand in FY2027. | — | — |
| Free cash flow | FY2027 | RTX expects free cash flow to increase in FY2027. | — | — |
| Operating cash flow, Iepa Recovery | Q4 FY2026 | $50.0 million | — | New |
| Units, Pratt and Whitney Aogs | Q4 FY2026 | Pratt & Whitney expects AOG reductions in Q4 FY2026. | — | — |
| Revenue, Raytheon, non Gaap, organic | FY2026 | Raytheon expects FY2026 sales growth in the low teens. | — | — |
| Operating income, Pratt and Whitney, non Gaap | FY2026 | $475.0 million–$525.0 million | — | New |
| Operating income, Collins, non Gaap | FY2026 | $925.0 million–$975.0 million | — | New |
| Revenue, Collins, organic | FY2026 | Collins expects FY2026 organic sales growth of low double digits. | — | — |
| Revenue, Collins, non Gaap | FY2026 | Collins expects FY2026 adjusted sales growth of high single digits. | — | — |
| Revenue | FY2027 | RTX expects FY2027 revenue and EPS growth. | — | — |
| Free cash flow | FY2026 | $9.0 billion–$9.2 billion | $8.5 billion–$8.8 billion | Raised |
| Revenue, Defense | FY2026 | RTX expects FY2026 defense sales to grow low double digits. | — | — |
| Revenue, Commercial Aftermarket | FY2026 | RTX expects FY2026 commercial aftermarket sales to grow low double digits to low teens. | — | — |
| Revenue, Commercial Oe | FY2026 | RTX expects FY2026 commercial OE sales to grow high single digits. | — | — |
| Revenue growth, Organic | FY2026 | 8.00%–9.00% | — | New |
| EPS, Adjusted | FY2026 | $7.10–$7.25 | — | New |