RTX (RTX) Q1 2025 earnings summary

Executive summary

• Q1 2025 sales reached $20.3 billion, up 5% year-over-year and 8% organically, with strong growth across all business segments, especially commercial aftermarket and defense.

• Adjusted segment profit was $2.5 billion, up 18%, with 120 basis points of margin expansion; adjusted EPS rose 10% to $1.47, while GAAP EPS was $1.14.

• Backlog stood at $217 billion, up 8% year-over-year, split between $125 billion commercial and $92 billion defense, with over $19 billion in new awards.

• Major milestones included FAA certification for GTF Advantage, LTAMDS transition to production, and significant investments in U.S. manufacturing capacity.

• Net income attributable to common shareowners was $1.54 billion, down from $1.71 billion, reflecting higher costs and the absence of prior year gains; legal settlements and the Pratt & Whitney powder metal issue continue to impact results.

Financial highlights

• Adjusted sales were $20.3 billion, up 5% (8% organically) year-over-year, with organic net sales growth of $1.5 billion offset by a $0.5 billion decline from divestitures.

• Segment operating profit reached $2.5 billion, up 18%, with adjusted segment margin expanding by 120 basis points to 11.9%.

• Adjusted EPS was $1.47, up from $1.34 year-over-year; GAAP EPS from continuing operations was $1.14.

• Free cash flow was $0.8 billion, up 10% year-over-year, with operating cash flow at $1.3 billion and capital expenditures of $0.5 billion.

• Returned $0.9 billion to shareholders in Q1 2025, mainly through dividends.

Outlook and guidance

• 2025 adjusted sales guidance is $83.0–$84.0 billion, with 4–6% organic growth and adjusted EPS of $6.00–$6.15; free cash flow expected at $7.0–$7.5 billion.

• Segment outlook: Collins Aerospace and Raytheon up low-single digits, Pratt & Whitney up high-single digits in sales and profit.

• Outlook excludes potential tariff impacts; estimated direct impact of $850 million pre-tax operating profit if tariffs persist through year-end.

• Full-year 2025 cash impact from the Pratt & Whitney powder metal matter estimated at $1.1–$1.3 billion.

• U.S. government funding remains stable under a continuing resolution through September 2025; no material impact expected.