10-QPeriod: Q2 FY2025

RTX Corp Quarterly Report for Q2 Ended Jun 30, 2025

Filed July 22, 2025For Securities:RTX

Summary

RTX Corporation (RTX) reported a significant turnaround in its financial performance for the second quarter and first half of 2025 compared to the same periods in 2024. Total net sales increased by approximately 9.5% for the quarter to $21.6 billion and 7.4% for the six months to $41.9 billion, driven by broad-based organic growth across all segments: Collins Aerospace, Pratt & Whitney, and Raytheon. This top-line growth, combined with the absence of substantial charges recorded in the prior year, led to a dramatic improvement in operating profit, which more than quadrupled to $2.15 billion for the quarter and nearly doubled to $4.18 billion for the six months. Diluted earnings per share (EPS) also saw a substantial increase, reaching $1.22 for the quarter and $2.36 for the six months, a significant leap from $0.08 in both periods of the prior year. The company continues to manage a complex global supply chain and navigate various geopolitical and economic uncertainties, including ongoing inflationary pressures and trade disputes. Despite these challenges, RTX demonstrated strong operational execution. The company is also actively managing its capital structure, with a stable debt-to-capitalization ratio and sufficient liquidity. Investors should note the substantial increase in net sales and profitability, reflecting a robust recovery and improved operational performance. However, the ongoing legal and regulatory matters, while not expected to have a material adverse effect, require continued monitoring.

Financial Highlights

51 data points
Beta

Revenue

$21.58B

Net Income

$1.66B

7.7% Net Margin

EPS (Diluted)

$1.22

Total Assets

$167.14B

Cash & Equivalents

$4.78B

Free Cash Flow

-$72.00M

Financial Statements
Beta
Revenue$21.58B
R&D Expenses$697.00M
SG&A Expenses$1.57B
Operating Expenses$19.48B
Operating Income$2.15B
Net Income$1.66B
EPS (Basic)$1.24
EPS (Diluted)$1.22
Shares Outstanding (Basic)1.34B
Shares Outstanding (Diluted)1.35B

Key Highlights

  • 1Total net sales increased by 9.5% year-over-year to $21.6 billion for the quarter and 7.4% to $41.9 billion for the first six months of 2025.
  • 2Operating profit surged by 306% to $2.15 billion for the quarter and 74% to $4.18 billion for the first six months, indicating a strong recovery.
  • 3Diluted EPS improved dramatically to $1.22 for the quarter and $2.36 for the six months, from $0.08 in the prior year.
  • 4All three segments – Collins Aerospace, Pratt & Whitney, and Raytheon – contributed to the organic net sales growth.
  • 5The company's backlog stands strong at $236 billion as of June 30, 2025, with a significant portion ($144 billion) from commercial aerospace.
  • 6RTX repurchased $50 million in stock during the first six months of 2025, and maintains a $615 million authorization for future repurchases.
  • 7The company's financial condition remains robust, with a debt-to-total capitalization ratio of 40% and $4.8 billion in cash and cash equivalents.

Frequently Asked Questions

The substantial increase in net sales and operating profit was driven by a combination of factors. Firstly, organic net sales grew across all three segments (Collins Aerospace, Pratt & Whitney, and Raytheon), reflecting strong demand in both commercial and defense markets. Secondly, the absence of significant one-time charges, such as the $918 million charge related to the Resolution of Certain Legal Matters and a $600 million charge for the Raytheon Contract Termination recorded in the prior year's second quarter, significantly boosted operating profit. Improved operational execution and favorable changes in contract estimates at completion also contributed to the enhanced profitability.

RTX is actively managing its global supply chain through various mitigation strategies, including exploring alternative sourcing for raw materials, optimizing operational efficiency, and implementing cost-reduction initiatives. The company is also monitoring inflationary pressures on material, component, and labor costs. While these pressures can impact profitability, particularly on fixed-price contracts, RTX is working to offset these effects through strategic pricing, operational improvements, and its digital transformation and operational modernization programs.

RTX is involved in several ongoing legal and regulatory matters, including investigations related to past payments in the Middle East, defective pricing claims, and export control violations. While the company has entered into agreements and settlements for some of these, such as Deferred Prosecution Agreements (DPAs) with the DOJ and settlements with the SEC and DOS, which include monetary penalties and compliance monitor requirements, management does not believe these matters will have a material adverse effect on its results of operations, financial condition, or liquidity. However, these require continued monitoring by investors.

Pratt & Whitney continues to address the 'Powder Metal Matter' impacting its PW1100G-JM (GTF) fleet. The company anticipates elevated aircraft on ground (AOG) levels through 2026. For the full year 2025, the estimated cash impact related to this issue is expected to be between $1.1 billion and $1.3 billion, covering customer compensation, credits, and partner recovery. While this matter involves significant estimated costs and is subject to variability based on various operational factors, RTX believes its accruals and management of the issue are appropriate.