RTX on Tuesday lifted its 2026 profit and revenue forecasts after third-quarter profit and sales both beat expectations, with the order backlog landing at a record $340 billion. The aerospace and defense group's EPS outlook moved to $7.65–$7.75 for 2026. Its earlier range stood at $7.10–$7.25. Sales guidance now spans $97–$97.5 billion, replacing a $95–$96 billion band.

For the September quarter, adjusted earnings printed at $2.26 a share against $1.70 in the year-ago quarter — a 33% climb that carried a $0.25-a-share benefit from IEEPA cost recovery. Revenue rose 11% to $24.97 billion, 12% on an organic basis. GAAP earnings were $1.89 a share, and net income grew 35% to $2.58 billion.

Chairman and CEO Chris Calio pointed to new bookings topping $81 billion behind the record backlog, and said demand across both the commercial and defense businesses continues to hold up.

Why it matters

A backlog number is a promise, and $340 billion is an unusually large one. It splits into $176 billion of commercial work and $164 billion of defense, which means RTX has roughly 3.5 years of guided 2026 sales already booked — one of the longest visibility runways in US industrials.

That visibility matters right now because the two demand engines are pulling in the same direction. Commercial aerospace is feeding on heavy airline maintenance outlays, while military programs are absorbing steady government budgets amid heightened geopolitical friction — the same friction that pushed Brent crude to a five-month high this morning, as we covered earlier. With China's Q3 GDP print underscoring an uneven global recovery (our analysis here), a business carrying 3.5 years of contracted sales stands apart from the cyclical pack.

What to watch

  • Segment mix in Q4. Raytheon's 14% advance rested on naval programs plus land-and-air defense hardware — Patriot, Standard Missile and Tomahawk volume. At Collins Aerospace, a 10% revenue gain came as commercial original-equipment sales surged 23%; Pratt & Whitney's 10% improvement rode a 21% jump in commercial aftermarket business.
  • Free-cash-flow delivery. The new FCF guide reads $9.0–$9.2 billion, up from the earlier $8.50–$8.75 billion band. At the top end that equals about 9.4% of guided sales.
  • New defense awards. The company booked Tomahawk and AMRAAM multi-year production contracts in the quarter. The pace of follow-on awards decides whether the backlog keeps growing or merely churns.
  • Macro cross-currents. A hot September PPI print of 6.3% and CPI of 3.7% have kept a potential Fed rate hike at the October 27–28 meeting on the table. Defense spending is fiscal and largely rate-insensitive, but commercial aerospace cycles with the economy.

MarketRadar take

This is a guidance raise built on booked orders, not forecasts. The midpoint of the new EPS range sits about 7.3% above the old one, while the new free-cash-flow midpoint runs 5.5% higher — management is converting demand into cash, not just revenue. New awards topping $81 billion in a single quarter equal more than three quarters of the current sales pace, which is rare for a company this size and suggests the defense-plus-aftermarket cycle still has legs.

One caveat: $0.25 of the Q3 EPS came from IEEPA recovery, a one-off-style benefit. Strip that out and the underlying $2.01 still beats last year's $1.70 by 18% — the story holds, just at a slightly lower volume than the headline 33% suggests.