Aerospace and protection firm Raytheon (NYSE:RTX) reported Q2 CY2026 outcomes beating Wall Street’s income expectations, with gross sales up 14.5% 12 months on 12 months to $24.71 billion. The firm’s full-year income steering of $95.5 billion on the midpoint got here in 1.5% above analysts’ estimates. Its non-GAAP revenue of $1.89 per share was 13.7% above analysts’ consensus estimates.
Revenue: $24.71 billion vs analyst estimates of $22.91 billion (14.5% year-on-year development, 7.8% beat)
Adjusted EPS: $1.89 vs analyst estimates of $1.66 (13.7% beat)
The firm lifted its income steering for the complete 12 months to $95.5 billion on the midpoint from $93 billion, a 2.7% enhance
Management raised its full-year Adjusted EPS steering to $7.18 on the midpoint, a 5.5% enhance
Operating Margin: 11.4%, up from 9.9% in the identical quarter final 12 months
Free Cash Flow was $2.88 billion, up from -$72 million in the identical quarter final 12 months
Market Capitalization: $262.4 billion
Company Overview
Originally targeted on refrigeration expertise, Raytheon (NSYE:RTX) offers quite a lot of services to the aerospace and protection industries.
Revenue Growth
Examining an organization’s long-term efficiency can present clues about its high quality. Any enterprise can put up quarter or two, however the perfect constantly develop over the lengthy haul. Luckily, RTX’s gross sales grew at an honest 8.3% compounded annual development fee during the last 5 years. Its development was barely above the typical industrials firm and exhibits its choices resonate with clients.
RTX Quarterly Revenue
Long-term development is an important, however inside industrials, a half-decade historic view could miss new business traits or demand cycles. RTX’s annualized income development of 9.6% during the last two years is above its five-year development, suggesting its demand not too long ago accelerated.
RTX Year-On-Year Revenue Growth
This quarter, RTX reported year-on-year income development of 14.5%, and its $24.71 billion of income exceeded Wall Street’s estimates by 7.8%.
Looking forward, sell-side analysts count on income to develop 4% over the subsequent 12 months, a deceleration versus the final two years. This projection does not excite us and implies its services will face some demand challenges.
ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips value 100 grand. The connectors that make them work value much more. One firm makes all of them.
Every AI server wants specialised infrastructure the chip firms do not make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old firm constructed a monopoly on it. The AI growth simply began. This inventory remains to be flying below the radar. Claim The Stock Ticker Here for FREE.
Operating Margin
RTX has carried out an honest job managing its value base during the last 5 years. The firm has produced a median working margin of 8.4%, larger than the broader industrials sector.
Looking on the development in its profitability, RTX’s working margin rose by 3.3 proportion factors during the last 5 years, as its gross sales development gave it working leverage.
RTX Trailing 12-Month Operating Margin (GAAP)
In Q2, RTX generated an working margin revenue margin of 11.4%, up 1.4 proportion factors 12 months on 12 months. This enhance was a welcome improvement and exhibits it was extra environment friendly.
Earnings Per Share
Revenue traits clarify an organization’s historic development, however the long-term change in earnings per share (EPS) factors to the profitability of that development — for instance, an organization might inflate its gross sales by extreme spending on promoting and promotions.
RTX’s EPS grew at 16.3% compounded annual development fee during the last 5 years, larger than its 8.3% annualized income development. This tells us the corporate grew to become extra worthwhile on a per-share foundation because it expanded.
RTX Trailing 12-Month EPS (Non-GAAP)
Diving into RTX’s high quality of earnings can provide us a greater understanding of its efficiency. As we talked about earlier, RTX’s working margin expanded by 3.3 proportion factors during the last 5 years. On high of that, its share rely shrank by 5.4%. These are optimistic indicators for shareholders as a result of bettering profitability and share buybacks turbocharge EPS development relative to income development.
RTX Diluted Shares Outstanding
Like with income, we analyze EPS over a shorter interval to see if we’re lacking a change within the enterprise.
For RTX, its two-year annual EPS development of 14.4% was decrease than its five-year development. We nonetheless suppose its development was good and hope it may well speed up sooner or later.
In Q2, RTX reported adjusted EPS of $1.89, up from $1.56 in the identical quarter final 12 months. This print simply cleared analysts’ estimates, and shareholders ought to be content material with the outcomes. Over the subsequent 12 months, Wall Street expects RTX’s full-year EPS to develop 2.9% from $6.92 to $7.12.
Key Takeaways from RTX’s Q2 Results
This was beat and lift quarter. We had been impressed by how considerably RTX blew previous analysts’ income expectations this quarter. We had been additionally glad its full-year EPS steering trumped Wall Street’s estimates. Zooming out, we expect this was print with some key areas of upside. The inventory traded up 5.2% to $204.90 instantly following the outcomes.
RTX put up rock-solid earnings, however one quarter does not essentially make the inventory a purchase. Let’s see if this can be a good funding. If you are making that call, you need to think about the larger image of valuation, enterprise qualities, in addition to the newest earnings. We cover that in our actionable full research report which you can read here, it’s free.
