RTX Stock Surges After Earnings; Defense Segment Drives Growth

RTX Corporation (RTX) stock has been on a roll since the company reported its fourth-quarter and full-year 2024 earnings, with the defense segment being a significant driver of growth. The aerospace and defense giant reported adjusted sales of $21.6 billion for the quarter, up 9% year-over-year (YoY), and adjusted earnings per share (EPS) of $1.54, a 19% increase from the prior year (RTX, 2025).



The defense segment, Raytheon, contributed significantly to RTX's overall growth. In the fourth quarter, Raytheon's sales increased by 4% YoY, driven by demand for land and air defense systems. The segment's operating profit grew by 18% during the same period, primarily due to drop-through on higher volume and lower restructuring costs (RTX, 2024).

RTX's strong performance in the defense segment can be attributed to several factors:

1. Higher volume across multiple programs and platforms: The defense segment experienced a 14% increase in sales due to higher volume across various programs and platforms, indicating strong demand for RTX's defense products and services (RTX, 2024).
2. Absence of charges related to litigation matters: In the third quarter of 2024, the defense segment benefited from the absence of a $57 million charge related to a litigation matter in the prior year. This absence contributed to the segment's overall profitability (RTX, 2024).
3. Lower restructuring costs: The defense segment also saw lower restructuring costs in the third quarter of 2024 compared to the prior year. This reduction in costs positively impacted the segment's operating profit (RTX, 2024).

RTX's management projects 2025 adjusted sales to be between $83 billion and $84 billion, targeting 4% to 6% organic growth. The adjusted EPS guidance for the year is set at $6 to $6.15, with projected free cash flow ranging from $7 billion to $7.5 billion. These forecasts indicate confidence in continued demand within defense and commercial markets and an optimistic outlook for further margin improvements and cash flow generation (RTX, 2025).

In conclusion, RTX stock has surged following the company's earnings report, with the defense segment being a significant driver of growth. The strong performance in the defense segment can be attributed to higher volume, the absence of litigation charges, and lower restructuring costs. With a robust backlog and long-term government contracts, RTX's defense segment is well-positioned for continued growth and profitability.