Peak Performance Against Headwinds

RTX Corporation, the world’s largest aerospace and defense giant, published its Q3 2025 results and surprised the market with a sharp upward revision of its full-year adjusted Earnings Per Share (EPS) and annual sales forecast. This report comes against a backdrop of complex market conditions, including escalating geopolitical tensions and strained supply chains, indicating the exceptional resilience of the company’s balanced business model, which incorporates exposure to both the commercial and defense sectors.

RTX reported adjusted earnings of $1.70 per share in the third quarter, a 17% increase year-over-year, with total sales of $22.5 billion, a 12% improvement. Following the consistent performance, management raised its full-year 2025 adjusted EPS guidance to a range of $6.10–$6.20 per share (up from the previous forecast of $5.80–$5.95) and its sales forecast to a range of $86.5–$87.0 billion. These figures exceed the average analyst consensus expectations.

The Dual Engines of Growth: Commercial Aerospace and Defense

The driving force behind the raised forecast lies in the superior performance of the two core business units: Collins Aerospace and Pratt & Whitney in the commercial sector, and Raytheon in the defense sector.

Accelerating Commercial Aftermarket: The Pratt & Whitney engine unit recorded an impressive 16% increase in sales, with growth in aftermarket services reaching a notable 23%. The shortage of new commercial aircraft and the need to keep older, more maintenance-intensive fleets flying for longer have created peak demand for maintenance, repair, and spare parts. As a key supplier for GTF engines and avionics products, RTX is positioning itself as a direct beneficiary of this trend.

Defense Driven by Global Tensions: In the defense sector, the Raytheon unit reported a 10% increase in sales. This surge resulted primarily from increased demand for air defense systems, particularly the Patriot missiles, driven by the war in Ukraine and global rearmament efforts. The growing investment by U.S. allies, including NATO nations, in modernizing their defense capabilities ensures a stable revenue stream for the unit.

Outlook and Risks: Backlog and Tariff Impact

Investors find great certainty in RTX’s backlog figure, which currently stands at a record $251 billion. This backlog, divided into approximately $148 billion in the commercial sector and $103 billion in defense, provides the company with operational certainty and a strong revenue horizon for years to come. RTX’s ability to convert this immense backlog into actual revenue is also supported by effective management of supply chain challenges and the successful mitigation of tariff impacts on raw material imports.

Forward Look

While the quarterly numbers and increased forecasts paint a positive picture, the challenges have not disappeared. The company must continue to manage the impact of tariffs, despite having successfully moderated them, and maintain a high production pace to meet the timelines of its vast order book. Continued growth in the commercial aftermarket is largely dependent on the recovery pace of global airlines, while defense growth will remain sensitive to shifts in global geopolitics and the defense budgets of key nations. RTX’s focus on increasing output and developing next-generation products positions it well to capitalize on secular trends over the long term, but continuous vigilance regarding changes in the global economy and politics is required.