Third quarter 2026
Filed Oct 20, 2026Strong operational performance drives double-digit sales and earnings growth in Q3; Raises 2026 outlook for adjusted sales, adjusted EPS, and free cash flow
Third-quarter sales rose 11%, adjusted EPS rose 33%, all three segments increased adjusted operating profit, and RTX raised its full-year adjusted sales, adjusted EPS, and free-cash-flow outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, quarter ended September 30GAAP | $24.96B | – | 11 % |
| Adjusted sales, quarter ended September 30non-GAAP | $24.96B | – | 11 % |
| Organic sales growth, quarter ended September 30non-GAAP | 12 % | – | 12 % |
| Operating profit, quarter ended September 30GAAP | $3.34B | – | – |
| Operating profit margin, quarter ended September 30GAAP | 13.4 % | – | – |
| Adjusted operating profit, quarter ended September 30non-GAAP | $3.99B | – | – |
| Cost of sales, quarter ended September 30GAAP | $19.16B | – | – |
| Research and development, quarter ended September 30GAAP | $711M | – | – |
| Selling, general, and administrative, quarter ended September 30GAAP | $1.92B | – | – |
| Total costs and expenses, quarter ended September 30GAAP | $21.79B | – | – |
| Net income attributable to common shareowners, quarter ended September 30GAAP | $2.58B | – | 35 % |
| Adjusted net income attributable to common shareowners, quarter ended September 30non-GAAP | $3.09B | – | 34 % |
| Diluted earnings per share, quarter ended September 30GAAP | $1.89 | – | 34 % |
| Adjusted diluted earnings per share, quarter ended September 30non-GAAP | $2.26 | – | 33 % |
| Effective tax rate, quarter ended September 30GAAP | 18.0% | – | – |
| Adjusted effective tax rate, quarter ended September 30non-GAAP | 18.7% | – | – |
| Net cash flows provided by operating activities, quarter ended September 30GAAP | $2.87B | – | (38) % |
| Capital expenditures, quarter ended September 30GAAP | −$749M | – | – |
| Free cash flow, quarter ended September 30non-GAAP | $2.12B | – | (47) % |
| Net sales, nine months ended September 30GAAP | $71.75B | – | – |
| Operating profit, nine months ended September 30GAAP | $8.70B | – | – |
| Adjusted operating profit, nine months ended September 30non-GAAP | $10.37B | – | – |
| Net income attributable to common shareowners, nine months ended September 30GAAP | $6.78B | – | – |
| Adjusted net income attributable to common shareowners, nine months ended September 30non-GAAP | $8.10B | – | – |
| Diluted earnings per share, nine months ended September 30GAAP | $4.96 | – | – |
| Adjusted diluted earnings per share, nine months ended September 30non-GAAP | $5.93 | – | – |
| Net cash flows provided by operating activities, nine months ended September 30GAAP | $8.27B | – | – |
| Free cash flow, nine months ended September 30non-GAAP | $6.31B | – | – |
| Company backlogother | $340B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Collins Aerospace, third quarter 2026Organic sales increased 12 percent, driven by a 23 percent increase in commercial OE, a 9 percent increase in commercial aftermarket, and a 7 percent increase in defense. | $8.38B | – | 10 % |
| Pratt & Whitney, third quarter 2026Sales growth was driven by a 21 percent increase in commercial aftermarket and a 2 percent increase in military, partially offset by a 5 percent decrease in commercial OE. | $9.23B | – | 10 % |
| Raytheon, third quarter 2026Growth was driven by higher volume on naval programs and land and air defense systems, including Patriot, Standard Missile, and Tomahawk. | $8.03B | – | 14 % |
Full year 2026 outlook
- RevenueAdjusted sales of $97.0 - $97.5 billion
- NoteOrganic sales growth of 10 to 11 percent
- NoteAdjusted EPS of $7.65 - $7.75
- NoteFree cash flow of $9.0 - $9.2 billion
Capital returns
- Dividends paid of $(984) million in the quarter ended September 30, 2026
- Dividends paid of $(2,882) million in the nine months ended September 30, 2026
- Repurchase of common stock of $— in the quarter ended September 30, 2026
- Repurchase of common stock of $— in the nine months ended September 30, 2026
What drove it
- RTX reported over $81 billion of new commercial and defense awards, resulting in a record backlog of $340 billion.
- Adjusted net income growth was driven by $1.1 billion of adjusted segment operating profit growth across all three segments, including $0.4 billion of IEEPA recovery.
- Collins Aerospace adjusted operating profit increased 50 percent, driven by drop through on higher commercial volume, commercial mix, and approximately $250 million of IEEPA recovery.
- Pratt & Whitney adjusted operating profit increased 29 percent, driven by drop through on higher commercial aftermarket volume and approximately $160 million of IEEPA recovery.
- Raytheon adjusted operating profit increased 32 percent, driven by improved net productivity, higher volume, and favorable mix, including Patriot programs.
Concerns
- Pratt & Whitney reported operating profit declined 19 percent to $608 million and included a charge of $363 million related to a customer bankruptcy.
- Pratt & Whitney commercial OE sales decreased 5 percent, driven by large commercial engine mix.
- Third-quarter operating cash flow declined 38 percent and free cash flow declined 47 percent versus the prior year.
- Adjusted net income growth was partially offset by higher taxes and lower pension income.
- Pratt & Whitney adjusted operating profit growth was partially offset by large commercial OE mix, commercial aftermarket mix, and higher SG&A expense.
What to watch
- Execution against full-year adjusted sales guidance of $97.0 - $97.5 billion and organic sales growth guidance of 10 to 11 percent.
- Delivery against adjusted EPS guidance of $7.65 - $7.75 and free-cash-flow guidance of $9.0 - $9.2 billion.
- The continuation of commercial OE, commercial aftermarket, military, naval-program, and air-defense volume trends.
- The contribution of IEEPA cost recovery, which added $0.25 to third-quarter adjusted EPS.
- Pratt & Whitney's customer-bankruptcy charge and commercial OE mix.
Balance sheet and cash flow
- Cash and cash equivalents of $9,173 million as of September 30, 2026, compared with $7,435 million as of December 31, 2025
- Short-term borrowings of $210 million as of September 30, 2026, compared with $204 million as of December 31, 2025
- Long-term debt currently due of $5,679 million as of September 30, 2026, compared with $3,412 million as of December 31, 2025
- Long-term debt of $31,490 million as of September 30, 2026, compared with $34,288 million as of December 31, 2025
- Operating cash flow of $2.9 billion in the third quarter, including approximately $0.3 billion from IEEPA recovery
- Capital expenditures of $0.7 billion in the third quarter
- Free cash flow of $2.1 billion in the third quarter
Analysis
RTX delivered a strong third quarter, with GAAP net sales of $24,965 million, up 11 %, and organic sales growth of 12 %. Adjusted diluted EPS rose 33 % to $2.26, while adjusted net income attributable to common shareowners increased 34 % to $3,091 million. The company cited $1.1 billion of adjusted segment operating profit growth across all three segments, including $0.4 billion of IEEPA recovery, as the principal earnings driver.
Commercial aerospace and defense both contributed to sales momentum. Collins Aerospace sales increased 10 %, with 12 percent organic growth led by commercial OE, commercial aftermarket, and defense. Pratt & Whitney sales rose 10 %, led by a 21 percent increase in commercial aftermarket and a 2 percent increase in military, although commercial OE fell 5 percent on large commercial engine mix. Raytheon posted the fastest reported sales growth at 14 %, supported by naval programs and land and air defense systems including Patriot, Standard Missile, and Tomahawk.
Profitability improved on an adjusted basis across each segment. Collins Aerospace adjusted operating profit rose 50 % and adjusted ROS increased to 21.3 % from 15.7 %. Pratt & Whitney adjusted operating profit increased 29 % and adjusted ROS rose to 10.5 % from 8.9 %, but reported operating profit declined 19 % because of a $363 million customer-bankruptcy charge. Raytheon adjusted operating profit increased 32 %, with adjusted ROS of 14.1 % versus 12.2 %, aided by improved net productivity, volume, favorable mix, and approximately $85 million of productivity benefits from an international contract modification and a favorable offset-obligation adjustment.
Cash conversion was weaker against a high prior-year comparison. Operating cash flow was $2,868 million, down 38 %, and free cash flow was $2,119 million, down 47 %, with the prior-year cash-flow statement including $1,188 million from dispositions of businesses, net of cash transferred. RTX ended the quarter with $9,173 million of cash and cash equivalents, $31,490 million of long-term debt, and $5,679 million of long-term debt currently due. The company paid $(984) million of dividends in the quarter and reported no common-stock repurchases.
Management raised its full-year 2026 outlook for adjusted sales to $97.0 - $97.5 billion from $95.0 - $96.0 billion, organic sales growth to 10 to 11 percent from 8 to 9 percent, adjusted EPS to $7.65 - $7.75 from $7.10 - $7.25, and free cash flow to $9.0 - $9.2 billion from $8.50 - $8.75 billion. The $340 billion backlog, including $176 billion of commercial and $164 billion of defense backlog, supports management's demand outlook, while the durability of aftermarket momentum, IEEPA recovery, Pratt & Whitney mix, and customer-bankruptcy effects remain important factors for the remainder of the year.
Management, verbatim
Our strong execution and operational focus in the third quarter enabled RTX to deliver double-digit organic sales growth across commercial aerospace and defense. Demand for our products remains robust with over $81 billion of new commercial and defense awards, resulting in a record backlog of $340 billion.
Chris Calio, RTX Chairman and CEO
Given our performance year to date, we are again raising our full year outlook for adjusted sales, adjusted EPS, and free cash flow. We remain focused on increasing output, optimizing our cost structure, and investing in new technologies to support our customers and drive continued growth.
Chris Calio, RTX Chairman and CEO
Not in the filing
stated, not guessed- Gross profit and gross margin
- Prior-quarter comparisons for revenue, earnings, margins, cash flow, segments, and EPS
- GAAP full-year 2026 revenue, EPS, operating cash flow, and free-cash-flow guidance
- Full-year 2026 gross-margin, operating-expense, and tax-rate guidance
- Share-repurchase authorization and remaining authorization
- Dividend per share
- Net debt
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.