RTX 2025 Q2 Earnings Strong Performance as Net Income Surges 885.7%

RTX (RTX), ranking 60th by market capitalization, reported its fiscal 2025 Q2 earnings on Jul 22nd, 2025. The company's results exceeded expectations with a significant increase in net income and a 9% rise in sales growth. RTX also raised its full-year sales guidance, reflecting strong operational performance and robust demand across its segments. However, the company lowered its full-year adjusted EPS guidance, taking into account expected tariff impacts and recent tax legislation. Overall, the results demonstrate RTX's solid market position and growth trajectory.

Revenue

In the second quarter of 2025, RTX reported total revenue of $21.58 billion, marking a 9.4% increase from $19.72 billion in the same quarter of the previous year. Collins Aerospace generated $7.62 billion, while Pratt & Whitney contributed $7.63 billion. Raytheon added $7 billion to the total. The revenue was partially offset by eliminations and other adjustments amounting to -$673 million. These figures reflect strong performance across the company's key segments, driving overall revenue growth.

Earnings/Net Income

RTX's earnings per share (EPS) experienced a dramatic increase, rising 1450.0% to $1.24 in Q2 2025 from $0.08 in Q2 2024. Net income also saw substantial growth, reaching $1.73 billion, an increase of 885.7% from $175 million in the previous year. This strong earnings performance highlights RTX's operational resilience and consistent profitability over the past two decades.

Post-Earnings Price Action Review

The post-earnings strategy of purchasing RTX shares after an earnings beat and holding them for 30 days has yielded impressive results, delivering a 117.21% return. This significantly outperformed the benchmark return of 88.65%, resulting in an excess return of 28.56%. The strategy demonstrated robust growth potential with a compound annual growth rate (CAGR) of 16.85%. Additionally, the maximum drawdown was 0.00%, and the strategy maintained a Sharpe ratio of 0.64. These metrics indicate effective risk management and suggest that this approach provides a promising balance of growth and stability for investors.

CEO Commentary

Christopher Calio, Chairman & CEO, highlighted that RTX delivered solid results in Q2 2025, with a 9% organic sales increase and a 12% rise in segment operating profit. He noted strong demand across all segments, with a book-to-bill ratio of 1.86 and a backlog of $236 billion, driven by significant wins in both commercial and defense sectors. Calio emphasized ongoing execution of commitments, including a 22% year-over-year improvement in MRO output despite a work stoppage. He expressed optimism about continued top-line growth and the positive impact of strategic partnerships, particularly in defense, while acknowledging challenges posed by tariffs.

Guidance

RTX has increased its full-year adjusted sales outlook to a range of $84.75 billion to $85.5 billion, reflecting 6% to 7% organic sales growth. Adjusted EPS is now expected to be between $5.80 and $5.95, adjusted from a prior range of $6.00 to $6.15. Free cash flow guidance remains at $7 billion to $7.5 billion for the year, driven by improvements in segment profit and working capital recovery. The company continues to assess and mitigate tariff impacts, projecting costs for 2025 to be around $500 million.

Additional News

RTX Corporation has announced the sale of its Collins Simmonds Precision Products business for $765 million, aligning with its strategic focus on core operations. Additionally, the company declared an 8% increase in its quarterly dividend, reflecting its commitment to returning capital to shareholders. In another development, RTX's Raytheon business was awarded a $74 million contract by the U.S. Navy for RAM Guided Missile Launching Systems, marking the largest U.S. RAM launcher order in over two decades. These strategic moves underscore RTX's efforts to strengthen its business portfolio and maintain its leadership in the aerospace and defense sectors.