It has been about a month since the last earnings report for RTX (RTX). Shares have added about 0.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RTX due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for RTX Corporation before we dive into how investors and analysts have reacted as of late.
RTX Beats on Q2 Earnings & Sales, Lowers ’25 EPS View
RTX Corporation’s second-quarter 2025 adjusted earnings per share (EPS) of $1.56 beat the Zacks Consensus Estimate of $1.45 by 7.6%. The bottom line also improved 10.6% from the year-ago quarter’s level of $1.41, driven by growth in adjusted operating profit.
Including one-time items, the company reported GAAP earnings of $1.22 per share, marking a significant improvement from 8 cents in the prior-year quarter.
The upside in GAAP earnings can be attributed to lower interest expense and higher operating profit.
Operational Performance
RTX’s second-quarter sales totaled $21.58 billion, which surpassed the Zacks Consensus Estimate of $20.58 billion by 5.1%. The top line also surged a solid 9.4% from $19.72 billion recorded for the second quarter of 2024.
The top-line improvement was driven by higher sales growth from all of RTX’s three business segments.
Total costs and expenses increased 6.4% year over year to $19.48 billion in the second quarter. The company generated an adjusted operating profit of $2.79 billion compared with $2.56 billion in the prior-year quarter.
RTX posted an interest expense of $457 million compared with $475 million in the prior-year period.
Segmental Performance
Collins Aerospace: Sales in this segment totaled $7.62 billion, up 8.9% year over year. This improvement can be primarily attributed to higher commercial aftermarket and defense sales. While continued growth in commercial air traffic drove commercial aftermarket sales growth, defense sales growth was driven by higher volume across multiple programs and platforms, including F-35 and the Survivable Airborne Operations Center program.
The segment’s adjusted operating profit totaled $1.25 billion compared with $1.15 billion in the year-ago quarter.
Pratt & Whitney: This segment’s sales totaled $7.63 billion, reflecting an improvement of 12.2% from the year-ago quarter’s reported number. This improvement can be attributed to sales growth in the commercial aftermarket and commercial OEM businesses. The increase in commercial aftermarket sales was driven by higher volume for Large Commercial Engines and favorable mix in Pratt Canada.
The adjusted operating profit totaled $608 million, up from $537 million in the year-ago quarter.
Raytheon: This segment recorded sales of $7 billion, up 6.4% year over year, driven by higher sales volume for land and air defense systems, including international Patriot and NASAMS as well as higher volume for naval programs, including SPY-6 and Evolved SeaSparrow Missile.
Adjusted operating profit amounted to $809 million compared with $709 million recorded in the corresponding period of 2024.
Financial Update
RTX had cash and cash equivalents of $4.78 billion as of June 30, 2025, compared with $5.58 billion as of Dec. 31, 2024.
The long-term debt totaled $38.26 billion as of June 30, 2025, down from $38.73 billion as of Dec. 31, 2024.
Net cash flow from operating activities was $1.76 billion as of June 30, 2025, compared with $3.08 billion at the end of June 2024.
Free cash flow totaled $0.72 billion compared with $2.07 billion at the end of June 2024.
Guidance
RTX partially updated its financial guidance for 2025.
The company now expects adjusted EPS to be in the band of $5.80-$5.95, down from the earlier guidance of $6.00-$6.15. The Zacks Consensus Estimate for 2025 EPS is pegged at $5.93, which lies near the low-end of the company’s updated guided range.
RTX raised its 2025 sales projection to the range of $84.75-$85.50 billion from the prior guidance of $83-$84 billion. The Zacks Consensus Estimate for the metric is pegged at $84.13 billion, which lies below the company’s newly guided range.
RTX still expects to generate free cash flow of $7.0-$7.5 billion for 2025.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, RTX has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise RTX has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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RTX Corporation (RTX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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