RTX Corporation (NYSE: RTX), one of the world’s largest aerospace and defense companies, released its financial results for the second quarter of 2025 on July 22, 2025. This quarterly report provides crucial insights into the company’s operational and financial performance, focusing on the contributions of its core business segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The purpose of this article is to provide a comprehensive analysis of RTX Corporation’s performance in Q2 2025, emphasizing the performance of its various business segments, identifying trends, challenges, and opportunities, and comparing the key business areas.

Overview of Key Business Segments

RTX Corporation operates through three leading business segments: Collins Aerospace, Pratt & Whitney, and Raytheon. Collins Aerospace provides a wide range of products, systems, and services for commercial, military, and business aviation markets. This includes avionics, cockpit, interiors, power generation systems, landing gear, brakes and wheels, flight and propulsion controls, and more. Collins Aerospace is a key player in both the Original Equipment (OE) and aftermarket sectors. Pratt & Whitney specializes in the design, manufacture, and service of aircraft engines and gas turbine engines for commercial, military, and business aviation. Pratt & Whitney is a leader in geared turbofan (GTF) engines, providing propulsion solutions for a wide range of aircraft. Raytheon focuses on advanced defense systems, electronics, sensors, and cyber solutions. Raytheon provides air and missile defense systems (such as Patriot and NASAMS), naval systems (such as SPY-6), and air and space defense systems. It is a critical player in global defense. These segments operate in global markets, influenced by diverse demographic and economic factors. For instance, growth in commercial air traffic directly impacts the performance of Collins Aerospace and Pratt & Whitney in the commercial aftermarket. Government defense spending, influenced by geopolitical tensions and domestic policies, directly affects the performance of Raytheon and the military portions of Collins Aerospace and Pratt & Whitney.

Performance Analysis

RTX Corporation demonstrated strong performance in Q2 2025, with consistent growth across all segments. Total sales reached $21.6 billion, a 9% increase compared to the prior year’s quarter, and a 9% organic growth excluding divestitures. The company’s backlog grew to $236 billion, indicating strong demand and future growth potential.

Collins Aerospace: Collins Aerospace’s reported and adjusted sales* amounted to $7.622 billion in Q2 2025, a 9% increase year-over-year. The sales increase was primarily driven by a 13% rise in commercial aftermarket, an 11% increase in defense, and a 1% increase in commercial OE, excluding the impact of divestitures. The growth in commercial aftermarket sales was attributed to continued growth in commercial air traffic. Reported operating profit increased by 5% to $1.173 billion. Adjusted operating profit* grew by 9% to $1.249 billion. The adjusted operating profit margin (ROS)* remained stable at 16.4%.

Pratt & Whitney: Pratt & Whitney’s reported and adjusted sales* reached $7.631 billion, a 12% increase compared to the prior year’s quarter. Sales growth was driven by a 19% increase in commercial aftermarket and a 15% increase in commercial OE. Military sales remained flat, primarily due to lower F135 volume, including the impact of contract award timing. Reported operating profit decreased by 9% to $492 million, impacted by a charge of approximately $100 million related to a customer bankruptcy. In contrast, adjusted operating profit* increased by 13% to $608 million. The adjusted operating profit margin (ROS)* rose by 10 basis points to 7.9%. The segment’s operating cash flow was impacted by a four-week work stoppage during the quarter.

Raytheon: Raytheon’s reported sales in Q2 2025 were $7.001 billion, an 8% increase compared to the prior year. Adjusted sales* increased by 6%. This growth was driven by higher volume in land and air defense systems, including international Patriot and NASAMS, as well as higher volume on naval programs like SPY-6 and Evolved SeaSparrow Missile. This growth was partially offset by lower development program volume within air and space defense systems. Raytheon’s reported operating profit was $805 million, a significant increase year-over-year, primarily due to a $575 million charge related to a contract matter initiated in Q2 2024. Adjusted operating profit* increased by 14% to $809 million. The adjusted operating profit margin (ROS)* decreased by 80 basis points to 10.8%.

Challenges and Opportunities

Challenges: The report indicates that the updated outlook reflects the expected impact of tariffs. These tariffs affect the company’s manufacturing and procurement costs, as noted in Collins Aerospace and Pratt & Whitney, where the impact of higher tariffs partially offset profitability. Changes related to recently enacted tax legislation also affect the financial outlook. While not explicitly mentioned as a specific challenge for this quarter, the company’s risk disclosures indicate that supply chain and labor market disruptions could impact performance. A four-week work stoppage at Pratt & Whitney impacted the company’s operating cash flow in the quarter. Pratt & Whitney incurred a charge of approximately $100 million due to a customer bankruptcy. Raytheon faced a significant $575 million charge related to a contract matter in Q2 2024, as well as charges related to prior legal matters.

Opportunities: RTX reports strong demand with a book-to-bill ratio of 1.86 in Q2 , and a backlog of $236 billion. This indicates significant future growth potential. The substantial 16% growth in overall commercial aftermarket , including 13% at Collins Aerospace and 19% at Pratt & Whitney, represents a strong growth engine. RTX is investing in innovation for future growth, such as collaborating with Shield AI to integrate AI-based capabilities into select products and partnering with Kongsberg to co-develop GhostEye subcomponents. The company continues strategic operational efficiency initiatives, such as achieving over 30% year-over-year improvement in PW1100 MRO output and leveraging CORE to increase GEM-T, Coyote, and AMRAAM output. The agreement to sell Collins’ Simmonds Precision Products business for $765 million , and the completed divestiture of Collins’ Actuation business, allow the company to focus on core activities and optimize its asset portfolio. The company is committed to significant capital returns to shareholders, with a target of $37 billion returned since the merger through 2025.

Inter-Segment Comparison

All three RTX segments showed impressive growth in sales and adjusted operating profit*. However, some differences can be observed. Pratt & Whitney demonstrated the highest organic sales growth rate (12%) , compared to Collins Aerospace (9%) and Raytheon (6%). Pratt & Whitney’s strong growth was primarily driven by increasing demand in the commercial aftermarket and for GTF engines. Collins Aerospace achieved the highest adjusted operating profit margin (ROS)* of 16.4% , while Raytheon recorded 10.8% and Pratt & Whitney 7.9%. Differences in profitability margins can be attributed to varying product mixes, segment-specific cost structures, and the impact of tariffs and operational disruptions such as work stoppages. Pratt & Whitney was affected by a significant charge related to a customer bankruptcy , while Raytheon was impacted by a previous charge related to a contract matter. Raytheon reported a backlog of $63.5 billion, with a book-to-bill ratio of 1.35 in the quarter and 1.49 for the trailing 12 months. The report states that Pratt & Whitney secured orders for over 1,000 GTF engines, strengthening the company’s overall backlog.

Conclusion

RTX Corporation delivered a strong second quarter in 2025, marked by significant growth in sales and adjusted profitability* across all three of its core operating segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The company benefited from robust demand in both commercial and defense end markets, as reflected in the double-digit growth in commercial aftermarket and a high book-to-bill ratio of 1.86. The growing backlog of $236 billion provides a solid foundation for future growth and demonstrates continued customer confidence in its products and services.

Despite challenges such as the impact of tariffs , changes in tax legislation , and one-time effects like the Pratt & Whitney work stoppage and a customer bankruptcy-related charge, the company managed to maintain positive momentum. The upward revision of adjusted sales* and organic sales growth forecasts for the full year reflects its strong operational performance in the first half.

RTX’s focus on strategic initiatives such as increasing PW1100 MRO engine output, leveraging AI technologies, and executing targeted divestitures underscores its commitment to continuous improvement and operational efficiency. The commitment to significant capital returns to shareholders, including an 8% increase in the quarterly dividend, complements the positive financial picture.

Looking ahead, RTX appears well-positioned for long-term profitable growth. The increasing demand in commercial aviation and defense markets, coupled with its substantial backlog and ongoing investment in innovation, are expected to fuel this growth. Challenges related to tariffs and tax changes require careful management, but the company seems to have accounted for them in its forecasts. Overall, RTX Corporation’s Q2 2025 report presents an optimistic outlook for a strong and stable company poised to capitalize on opportunities in its markets.