RTX Earnings Will Add Fuel to a Fire That’s Seen the Stock Double

RTX Corp. (NYSE: RTX) — formerly known as Raytheon — is set to report earnings tomorrow and I think investors are going to like what they see.

This is a company I’ve been recommending for years and it hasn’t yet let me down.

In fact, back in 2023, I named it as one of my top stocks to buy after its shares plunged on news of a product recall in its Pratt & Whitney division. 

I even called it the “Best Bargain Buy in the Defense Sector.”

And it truly was.

RTX stock has surged has more than doubled since then — surging from about $70 to $150. 

It also jumped more than 3% last month, bringing its year-to-date gain to 30%. 

The latest surge was spurred by news that President Trump agreed to sell a new tranche of Patriot missiles to Ukraine via the EU. 

The Patriot missile system is one of the most trusted, effective, and frequently deployed anti-air defense systems in the world. It intercepts all manner of airbound threats, including surface-to-surface and air-to-surface missiles, as well as rockets and mortars. It’s deployed in 19 countries around the world.

In addition to Ukraine, recent contracts for the system include a $529 million contract to equip the Netherlands and a $946 million contract with Romania.

Meanwhile, the U.S. Army is planning to allocate more than $1.3 billion toward the purchase of Patriot air defense missiles in the upcoming fiscal year.

And that’s not all. 

RTX’s Raytheon defense division manufactures a massive array of missile and rocket systems, including the Stinger, Tomahawk, and Javelin, which it co-produces with Lockheed Martin. 

It’s also a partner with Rafael on Israel’s Iron Dome, manufacturing Tamir and SkyHunter missiles that intercept inbound threats. 

For that reason, RTX is likely to be a key partner on America’s Golden Dome initiative, as well. 

And that’s just the tip of the iceberg. 

RTX makes all manner of defense platforms, making it one of a handful of defense contractors benefiting from a massive surge in defense spending — both at home and abroad. 

Indeed, President Trump’s defense budget will see the United States spend more than $1 trillion on defense next year. And global defense spending will also continue to grow after climbing 9.4% in 2024 to a record $2.7 trillion.

So what do RTX earnings have in store for tomorrow?

Well…

RTX Earnings

In the first quarter of the year, RTX reported a 5% increase in revenue ($20.3 billion) with 8% organic growth.

Interestingly, the Raytheon division saw its sales fall 5%, to $6.34 billion. However, that was due to the fact that the company sold off its cybersecurity, intelligence, and services business. Excluding that divestiture, Raytheon sales actually rose 2%. 

Additionally, revenue at the company’s commercial divisions — Collins Aerospace and Pratt & Whitney — jumped 8% and 14%, respectively.

It wasn’t all sunshine and rainbows, though, as the company did warn about a potential $850 million impact from tariffs. 

That cost may or may not materialize. But the fact that it’s been acknowledged and baked into its full-year guidance and share price suggests the company could surprise to the upside at year-end if it’s avoided or mitigated.

As of now, the company expects to see organic growth of up to 6% for the full fiscal 2025. It projects total sales of between $83 billion and $84 billion.

Moving on to tomorrow’s second-quarter results, Wall Street anticipates net earnings of $1.45 per share — 2.8% from $1.41 in the second quarter of 2024. 

It’s worth noting, however, that RTX has beaten analysts’ expectations in each of the last four quarters. Most recently its first-quarter EPS of $1.47 topped estimates by about 9%.

So I wouldn’t bet against it.  

Not tomorrow and not long term.