RTX US S&P 500Russell 1000 Earnings call · transcribed from the recording
RTX Corporation (RTX) · Q3 2026 results and valuation
Share price: $201.29 · 2026-11-11
RTX Corporation is an aerospace and defense company that provides systems and services for commercial, military, and government customers worldwide. The company manufactures and services aircraft engines, components, and electronics for the aviation and defense industries. It operates in the original equipment and aftermarket parts and services segments. Source: 10-K annual report (2026-02-06)
Results Q3 2026 vs Q2 2026 · previous quarter · published 20 Oct 2026 and 23 Jul 2026
Net income up 20.8% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
1 · Numbers
+20.8%
Net income vs Q2 2026
Outlook given
Net income 2.58B vs 2.14B
Revenue +1.0%
Against the same quarter last year (Q3 2025) it is +34.7%, so it is not just seasonal.
Why Against the same quarter last year (+34.7%), net income rose primarily because adjusted operating profit grew due to higher sales volume across the company, improved productivity at Raytheon, and approximately $250 million of IEPA cost recovery.
2 · How management spoke
Typical
More upbeat than 64% of company calls
Answers to analysts: typical, in line with the script.
Last call it was different: the answers were more upbeat than the script.
3 · What stood out
RTX raised its operating profit growth expectations from $575 to $650 million to $800 to $850 million versus 2025 due to higher sales volume, improved productivity, and favorable program mix.
Valuation
Is RTX Corporation undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 9.7% growth a year (3-year revenue growth), the model's fair value is $115.57 a share — the stock trades 74% above it. Today's price assumes 16.3% growth a year.
Current price
$201.29
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+16.3% for 10 yrs
Fair value / share
$115.57
Buy below
$86.67
Price vs fair value
Overvalued 74%
Price vs buy-below price
Overvalued 132%
Read between the lines
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Guidance
RTX raised its operating profit growth expectations from $575 to $650 million to $800 to $850 million versus 2025 due to higher sales volume, improved productivity, and favorable program mix.
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Guidance
RTX raised its full-year adjusted sales outlook to a range of $97 to $97.5 billion, up from the previous range of $95 to $96 billion.
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Guidance
RTX increased its full-year free cash flow guidance to a range of $9 to $9.2 billion from the previous range of $8.5 to $8.75 billion due to EPA recovery.
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Figure
Adjusted segment operating profit rose 39% year-over-year to $3.9 billion due to higher sales volume, improved productivity at Raytheon, and IEPA cost recovery.
Source quote
“Adjusted segment operating profit of $3.9 billion was up 39% year-over-year, driven by drop-through on higher sales volume across the company, improved productivity at Raytheon, and IEPA cost recovery.”
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Guidance
RTX expects low double-digit increases in shop visits starting in 2027, which indicates growth in customer traffic for the coming years.
4 more
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Figure
Growth in the GTF program is driven by Pratt and is expected to outweigh the structure decline in the V2500 powered aircraft.
Source quote
“But as we look at where we are today and the top-line growth at Pratt, a lot of that's being driven off of our GTF program, which over time will far outweigh the structure decline in the V2500 powered aircraft.”
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Figure
RTX ended Q3 with a record backlog of $340 billion, increasing 36% year-over-year and 18% sequentially.
Source quote
“RTX ended Q3 with another record backlog of $340 billion, up 36% year-over-year and 18% sequentially.”
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Figure
RTX received over 800 GTF orders and commitments this year and has a backlog of over 8,000 engines.
Source quote
“So far this year, we've received over 800 GTF orders and commitments and have a backlog of over 8,000 engines.”
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Guidance
RTX raised its full-year outlook for adjusted sales, EPS, and free cash flow based on performance to date.
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“As we look beyond this year, based on the fundamentals of our company, our record backlog position and operating momentum, we expect another year of top and bottom line growth,...”
“And we now expect operating profit to grow between $800 and $850 million versus 2025, up from our prior expectation of between $575 and $650 million, driven by the drop-through...”
“By channel, we now expect commercial OE sales to grow high single digits, which is at the higher end of our prior expectation of mid to high single digits, driven...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 24.96B | 24.71B | +1.0% | 22.48B | +11.1% |
| Operating income | 3.34B | 2.81B | +18.7% | 2.52B | +32.3% |
| Net income | 2.58B | 2.14B | +20.8% | 1.92B | +34.7% |
| EPS | 1.89 | 1.57 | +20.4% | 1.41 | +34.0% |
| P/E today 30.8 | 30.2 | 33.4 | −3.2 | 34.4 | −4.2 |
Topics
Most discussed now
- Enabled by these actions, Collins has delivered double-digit organic sales growth this year while reducing indirect labor headcount.
- Adjusted operating profit of $1.8 billion was up $594 million versus the prior year, driven by drop-through on higher commercial...
- Adjusted EPS of $2.26 was up 56 cents, or 33% year-over-year, including 25 cents from IEPA cost recovery.
- New The first thing is RTX has obviously been tailing down on the powdered metal payments.
- RTX also continues to see robust global demand for its products and services, and are very well positioned to meet...
Faded since Q2 2026
- Fading Commercial OE sales were down 8% as increased engine deliveries were more than offset by large commercial engine mix.
- Fading RTX has given very, very clear demand signals, very helpful in terms of what the government has done there as well.
- Fading Some of those are in the defense industrial base today, and some of those are outside the defense industrial base...
- Fading The rest, 40% of that is going to come from cost reduction actions.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
RTX reported third-quarter 2026 sales of $25.0 billion, up 11 percent from the prior year, and adjusted EPS of $2.26, up 33 percent year over year.
- Director or officer change · SEC 8-K
RTX announced that Jill Albertelli will succeed Shane Eddy as president of Pratt & Whitney effective January 1, 2027, following the company's 2025 sales of more than $88 billion.
- Results of operations · SEC 8-K
RTX reported Q2 2026 sales of $24.7 billion, up 14 percent from the prior year, and adjusted EPS of $1.89, up 21 percent year over year.
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
RTX reported first-quarter 2026 sales of $22.1 billion, up 9 percent from the prior year, and adjusted EPS of $1.78, up 21 percent year over year.
- Director or officer change · SEC 8-K
James A. Winnefeld Jr. resigned as a director of RTX Corporation on March 5, 2026, reducing the size of the Board from eleven to ten members.
- Results of operations · SEC 8-K
RTX reported full-year 2025 sales of $88.6 billion, up 10 percent from the previous year, and adjusted EPS of $6.29, up 10 percent year over year.
- Other events · SEC 8-K
RTX Corporation initiated a buy-out conversion of a group annuity contract involving $2.5 billion in pension obligations and a projected one-time, non-cash pretax pension settlement charge of approximately $300 million in the fourth quarter of 2025.