Why Has RTX (RTX) Decreased by 1.7% Following Its Most Recent Earnings Announcement?

RTX Earnings Update: Recent Performance and Outlook

Over the past month, RTX shares have declined by approximately 1.7%, lagging behind the S&P 500 index. Investors may be questioning whether this downward movement will persist as the next earnings announcement approaches, or if a turnaround is on the horizon. To better understand the situation, let's review the latest financial results and key factors influencing RTX's performance.

Highlights from Q4 2025 Results

RTX Corporation reported adjusted earnings per share of $1.55 for the fourth quarter of 2025, exceeding the consensus estimate of $1.46 by 5.9%. This figure also represents a slight increase from the $1.54 reported in the same period last year. On a GAAP basis, earnings reached $1.19 per share, up from $1.10 a year earlier. For the full year 2025, adjusted EPS came in at $6.29, compared to $5.73 in 2024.

Revenue Growth

Fourth-quarter sales totaled $24.24 billion, surpassing expectations by 6.6% and marking a 12.1% rise from the $21.62 billion reported in Q4 2024. Annual revenues for 2025 reached $88.6 billion, up from $80.74 billion the previous year.

Operational Metrics

RTX's total costs and expenses climbed 10.9% year-over-year to $21.95 billion in the quarter. Adjusted operating profit improved to $2.6 billion, compared to $2.1 billion in the prior year. Interest expenses decreased to $400 million from $486 million a year earlier.

Segment Performance Overview

• Collins Aerospace: Segment sales reached $7.74 billion, a 3% increase year-over-year, driven by growth in commercial original equipment (OE), aftermarket, and defense.
• Pratt & Whitney: Sales rose to $9.5 billion, up 25% from the previous year. Commercial OE sales grew 28%, aftermarket sales increased 21%, and military sales jumped 30%. Growth was attributed to higher volumes and favorable product mix in large commercial engines.
• Raytheon: This segment generated $7.66 billion in sales, a 7% improvement year-over-year, fueled by increased demand for land and air defense systems as well as naval programs.

Financial Position

As of December 31, 2025, RTX held $7.44 billion in cash and equivalents, up from $5.58 billion at the end of 2024. Long-term debt decreased to $34.29 billion from $38.73 billion a year earlier. Operating cash flow for 2025 was $10.57 billion, compared to $7.16 billion in 2024. Free cash flow improved to $7.94 billion, up from $4.53 billion last year.

Forward Guidance

RTX anticipates adjusted EPS for 2026 to be between $6.60 and $6.80. The consensus estimate for 2025 EPS stands at $6.66, which is below the midpoint of the company's forecasted range. Sales for 2026 are projected to fall between $92 billion and $93 billion, with free cash flow expected to range from $8.25 billion to $8.75 billion.

Estimate Trends

Over the past month, analysts' estimates for RTX have remained largely unchanged, reflecting a stable outlook.

VGM Score Analysis

• Growth Score: D (below average)
• Momentum Score: A (strong)
• Value Score: C (mid-range, placing RTX in the middle 20% for value investors)

RTX's overall VGM Score is C, which may appeal to investors who prefer a balanced approach rather than focusing on a single investment strategy.

Stock Outlook

RTX currently holds a Zacks Rank #3 (Hold), suggesting that the stock is expected to deliver performance in line with the broader market over the coming months.