research report · RTX

RTX Corp

Johannes Vermeer, Woman Holding a Balance, c. 1664, detail · National Gallery of Art

Viridis’s deep research report, written Nov 1, 2026 from its quarterly report (10-Q for the quarter ended Sep 30, 2026, filed Oct 20, 2026). Written and checked with Anthropic’s Claude models.

your email, no card; what you get

business trajectory

Improving

better on balance: sales, margins, cash or competitive position

financial resilience

Strong

can meet its obligations and fund its plan for two years with money it can count on, with room

Judgments of the business from its filings, not of its shares: no valuation, no advice.

bottom line

RTX's operations are getting stronger. Third-quarter 2026 sales rose 12% organically, segment margins widened even after removing one-time tariff refunds, and backlog reached a record $340B as the Pentagon converted munitions frameworks into multi-year contracts. The headline figures overstate the underlying run-rate. $0.25 of the $2.26 adjusted EPS is a refund of tariffs the Supreme Court struck down, and quarterly free cash flow fell 47% to $2.1B as customer advances ran off. The balance sheet is not the constraint: $9.2B of cash, an undrawn $5.0B credit line and investment-grade ratings on positive outlook. The open questions are whether the defense backlog gets funded and whether cash catches up with earnings.

what changed this quarter

  • Sales were $24,965M against $22,478M a year earlier, up 11% (12% organic). GAAP diluted EPS was $1.89 against $1.41, and adjusted EPS $2.26 against $1.70.
  • Operating cash flow was $2,868M against $4,639M. Free cash flow (operating cash flow minus capital spending) was $2,119M against $4,025M.
  • The 2026 outlook was raised again: adjusted sales to $97.0–97.5B (from $95.0–96.0B), adjusted EPS to $7.65–7.75 (from $7.10–7.25), and free cash flow to $9.0–9.2B (from $8.50–8.75B).
  • RTX received undefinitized contract actions, meaning work authorized before final terms are agreed. Tomahawk is up to ~$23B over seven years and AMRAAM up to $20.7B; SM-6 (up to $24.4B) and SM-3 IB (up to $6.3B) followed in early Q4.
  • On September 15, RTX announced that Pratt & Whitney president Shane Eddy will step down January 1, 2027, with Jill Albertelli succeeding him. On September 21, a Navy administrative agreement found suspension or debarment unnecessary.

in the full report

Its findings, each with the evidence, the strongest counterpoint and what would prove it wrong:

  • Margins improved beneath the tariff refund, but not at Pratt & Whitney
  • The backlog jump adds visibility mostly after 2027 and rests on appropriations not yet made
  • Cash conversion lags earnings this year
  • Customer-bankruptcy charges are called unusual but recur yearly

Then its finances, the quality of its earnings, its management, the case for and against, and what to watch, its claims cited to the filings and checked against them.

read it whole

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