RTX Corp RTX

RTX continues to focus on operational execution, leveraging its core operating system and digital solutions to increase output and deliver its record backlog. The GTF fleet management plan remains on track, with P100 AOGs down 25% year-to-date, driven by a 40% year-over-year increase in MRO output and a 23% reduction in turnaround time. Raytheon has more than doubled year-over-year output for critical munitions and the Coyote counter UAS effector in the first half of the year. The company's connected factory network and AI platform are strengthening performance through faster cycle times and improved decision-making.

RTX is making focused investments to meet long-term global demand. Raytheon is investing an additional $100 million domestically to boost GEM-T component production and accelerate LTAMDS test capabilities, and is collaborating with NATO nations to expand AMRAM component suppliers. Pratt is investing over $100 million in the U.S. to expand GTF MRO capacity. Collins completed a commercial MRO expansion in Malaysia. Key technology milestones include Collins' selection for the U.S. Air Force's collaborative combat aircraft program, Pratt's GTF Advantage engine certification (with entry into service expected later this year), and Raytheon's development of a longer-range StormBreaker variant using a Pratt engine.

The defense market shows strong global demand, reinforced by significant awards. Domestically, bipartisan support for a substantial increase in 2027 defense spending, including RTX priority programs, is encouraging. The company is actively working to convert framework agreements with the Department of War into definitive contracts, engaging with the supply chain to ensure capacity and exploring second/third potential suppliers. International demand remains robust, with Raytheon booking over $10 billion in international awards in the first half, more than doubling year-over-year, and 48% of its backlog now international.

Commercial aerospace continues to exhibit strong demand, particularly in the aftermarket. Global RPKs are expected to grow across most regions, and low engine retirement rates support a strong aftermarket outlook. Airframers anticipate further rate growth in the second half, driving demand for OE products. Pratt's V2500 fleet continues to be a strong contributor to aftermarket revenue with low retirement activity, and the GTF aftermarket is expected to generate low double-digit margins with opportunities for further improvement as new material and benefits are introduced.

Collins is demonstrating strong performance with a significant increase in operating profit despite tariff headwinds^🌐. The segment expects a substantial step-up in profitability in the second half, driven by higher volume drop-through and aggressive structural cost reduction actions. These initiatives include consolidating operations, increasing hours at best-cost locations, and attacking overhead layers, which are expected to yield benefits over the next several years and contribute to achieving long-term margin targets of 19-20%.