智通财经7月29日电，巴克莱银行将雷神技术（RTX）目标价从130美元上调至153美元。 ...

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on RTX, and highlights the potential misalignment of interests between brokerage analysts and retail investors [1][10]. Brokerage Recommendations for RTX - RTX has an average brokerage recommendation (ABR) of 1.71, indicating a consensus between Strong Buy and Buy, based on recommendations from 24 brokerage firms [2]. - Out of the 24 recommendations, 15 are classified as Strong Buy, accounting for 62.5%, while one is classified as Buy, making up 4.2% of the total [2]. Limitations of Brokerage Recommendations - The article suggests that relying solely on brokerage recommendations may not be wise, as studies indicate limited success in guiding investors towards stocks with the best price increase potential [5]. - Brokerage analysts tend to exhibit a strong positive bias in their ratings, with five Strong Buy recommendations for every Strong Sell recommendation, which may mislead investors [6][10]. Zacks Rank as an Alternative - Zacks Rank, a proprietary stock rating tool, categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, which are strongly correlated with near-term stock price movements [8][11]. - The Zacks Rank is updated more frequently than the ABR, making it a more timely indicator of future price movements [12]. Current Earnings Estimates for RTX - The Zacks Consensus Estimate for RTX's current year earnings has declined by 0.4% over the past month to $5.99, indicating growing pessimism among analysts regarding the company's earnings prospects [13]. - This decline in earnings estimates has resulted in a Zacks Rank of 4 (Sell) for RTX, suggesting caution despite the Buy-equivalent ABR [14].

智通财经7月28日电，杰富瑞将航空航天防务巨头雷神技术（RTX）目标价从160美元上调至165美元。 ...

Core Insights - Raytheon has launched the MTS-A HD, a next-generation Multispectral Targeting System variant designed to enhance maritime helicopter operations with improved visual capabilities [1][2] - The new system offers better targeting precision, imaging clarity, and operational flexibility, and is being developed in collaboration with industry partners to reduce costs and accelerate production [2][3] - The MTS-A HD system is already in use on over 400 U.S. Navy helicopters and features a modular architecture for easy integration and upgrades [3] Company Overview - Raytheon, part of RTX, is a leading defense solutions provider, focusing on technologies for air and missile defense, smart weapons, advanced sensors, and more [5] - RTX employs over 185,000 people globally and reported sales of $69 billion in 2023, emphasizing its commitment to advancing technology and integrated defense systems [6] International Interest - The MTS-A HD system has garnered significant interest from international markets, including Australia, Denmark, Saudi Arabia, India, Norway, Greece, Spain, South Korea, and emerging markets in Europe and Asia [4]

RTX stock is expensive when valued on earnings. Valued on free cash flow... it's even more expensive. A funny thing happened to RTX Corporation (RTX 4.81%) yesterday -- meaning funny-strange. RTX reported 9% sales growth in its fiscal second-quarter earnings report, and beat analyst forecasts with $1.56 per share earned on revenue of $21.6 billion. Is RTX stock a buy? Call me a cynic, but I just don't see things that way. Beyond guidance, when I look at RTX stock, I see a defense company earning $6.1 billio ...

白宫贸易顾问纳瓦罗：美国销售武器将让Raytheon（雷神）乐不可支。 ...

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements and accompanying notes for the recent quarter and six-month period [Condensed Consolidated Statement of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) **Quarter Ended June 30, 2025 vs. 2024 (dollars in millions):** | Metric | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $21,581 | $19,721 | $1,860 | 9.4% | | Operating Profit | $2,146 | $529 | $1,617 | 305.7% | | Net Income | $1,725 | $175 | $1,550 | 885.7% | | Net Income Attributable to Common Shareowners | $1,657 | $111 | $1,546 | 1392.8% | | Diluted EPS | $1.22 | $0.08 | $1.14 | 1425.0% | **Six Months Ended June 30, 2025 vs. 2024 (dollars in millions):** | Metric | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $41,887 | $39,026 | $2,861 | 7.3% | | Operating Profit | $4,181 | $2,399 | $1,782 | 74.3% | | Net Income | $3,350 | $1,918 | $1,432 | 74.7% | | Net Income Attributable to Common Shareowners | $3,192 | $1,820 | $1,372 | 75.4% | | Diluted EPS | $2.36 | $1.36 | $1.00 | 73.5% | [Condensed Consolidated Statement of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) **Quarter Ended June 30, 2025 vs. 2024 (dollars in millions):** | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $1,725 | $175 | $1,550 | | Other Comprehensive Income (Loss), net of tax | $816 | $(83) | $899 | | Comprehensive Income | $2,541 | $92 | $2,449 | | Comprehensive Income Attributable to Common Shareowners | $2,473 | $28 | $2,445 | **Six Months Ended June 30, 2025 vs. 2024 (dollars in millions):** | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $3,350 | $1,918 | $1,432 | | Other Comprehensive Income (Loss), net of tax | $1,364 | $(299) | $1,663 | | Comprehensive Income | $4,714 | $1,619 | $3,095 | | Comprehensive Income Attributable to Common Shareowners | $4,556 | $1,521 | $3,035 | [Condensed Consolidated Balance Sheet](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) **As of June 30, 2025 vs. December 31, 2024 (dollars in millions):** | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | $167,139 | $162,861 | $4,278 | | Total Liabilities | $102,892 | $100,903 | $1,989 | | Total Equity | $64,206 | $61,923 | $2,283 | | Cash and Cash Equivalents | $4,782 | $5,578 | $(796) | | Accounts Receivable, net | $12,385 | $10,976 | $1,409 | | Inventory, net | $14,012 | $12,768 | $1,244 | | Short-term borrowings | $1,635 | $183 | $1,452 | | Long-term debt | $38,259 | $38,726 | $(467) | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) **Six Months Ended June 30, 2025 vs. 2024 (dollars in millions):** | Activity | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net Cash Flows Provided by Operating Activities | $1,763 | $3,075 | $(1,312) | | Net Cash Flows Used in Investing Activities | $(1,187) | $(40) | $(1,147) | | Net Cash Flows Used in Financing Activities | $(1,409) | $(3,591) | $2,182 | | Net Decrease in Cash, Cash Equivalents, and Restricted Cash | $(779) | $(568) | $(211) | [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) **Six Months Ended June 30, 2025 vs. 2024 (dollars in millions):** | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Equity Beginning Balance | $61,923 | $61,410 | $513 | | Net Income Attributable to Common Shareholders | $3,192 | $1,820 | $1,372 | | Dividends on Common Stock | $(2,543) | $(2,415) | $(128) | | Other Comprehensive Income (Loss), net of tax | $1,364 | $(299) | $1,663 | | Equity at June 30 | $64,206 | $60,650 | $3,556 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1: Basis of Presentation](index=9&type=section&id=Note%201%3A%20Basis%20of%20Presentation) This note clarifies the unaudited basis of the financial statements, reclassifications, and varying fiscal calendars for its segments - The Condensed Consolidated Financial Statements are unaudited and include normal recurring adjustments[22](index=22&type=chunk)[24](index=24&type=chunk) - Raytheon follows a **4-4-5 fiscal calendar**, while Collins Aerospace and Pratt & Whitney use a calendar quarter end[25](index=25&type=chunk) [Note 2: Acquisitions and Dispositions](index=9&type=section&id=Note%202%3A%20Acquisitions%20and%20Dispositions) This note details agreements to sell the Simmonds Precision Products and actuation businesses and the completed sale of the CIS business - On June 30, 2025, RTX entered into a definitive agreement to sell the Simmonds Precision Products business for approximately **$0.8 billion** in cash[27](index=27&type=chunk) - On March 29, 2024, RTX completed the sale of its Cybersecurity, Intelligence and Services (CIS) business for approximately **$1.3 billion** in cash, resulting in a pre-tax gain of **$0.4 billion**[28](index=28&type=chunk) - RTX completed the sale of the actuation and flight control business for gross proceeds of **$1.8 billion** on July 21, 2025[29](index=29&type=chunk) [Note 3: Goodwill and Intangible Assets](index=10&type=section&id=Note%203%3A%20Goodwill%20and%20Intangible%20Assets) Goodwill balances increased slightly to $53.3 billion, while amortization of intangible assets for the first half of 2025 was $1,009 million **Goodwill Balance (dollars in millions):** | Segment | Dec 31, 2024 | Acquisitions and Divestitures | Foreign Currency Translation and Other | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Collins Aerospace | $32,223 | $(256) | $793 | $32,760 | | Pratt & Whitney | $1,563 | — | — | $1,563 | | Raytheon | $18,986 | — | $1 | $18,987 | | **Total** | **$52,789** | **$(256)** | **$794** | **$53,327** | **Intangible Assets (dollars in millions):** | Type | June 30, 2025 Gross Amount | June 30, 2025 Accumulated Amortization | Dec 31, 2024 Gross Amount | Dec 31, 2024 Accumulated Amortization | | :--- | :--- | :--- | :--- | :--- | | Amortized Total | $40,597 | $(16,329) | $40,436 | $(15,456) | | Indefinite-lived Total | $8,480 | — | $8,463 | — | | **Total** | **$49,077** | **$(16,329)** | **$48,899** | **$(15,456)** | **Amortization Expense (dollars in millions):** | Period | 2025 | 2024 | | :--- | :--- | :--- | | Quarter Ended June 30 | $508 | $534 | | Six Months Ended June 30 | $1,009 | $1,060 | **Expected Amortization (dollars in millions):** | Year | 2025 (Remaining) | 2026 | 2027 | 2028 | 2029 | 2030 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expense | $1,069 | $2,000 | $1,890 | $1,819 | $1,679 | $1,642 | [Note 4: Earnings Per Share](index=10&type=section&id=Note%204%3A%20Earnings%20Per%20Share) Diluted EPS for Q2 2025 was $1.22, a significant increase from $0.08 in the prior year, reflecting higher net income **Earnings Per Share Attributable to Common Shareowners (dollars and shares in millions, except per share amounts):** | Metric | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to common shareowners | $1,657 | $111 | $3,192 | $1,820 | | Basic weighted average number of shares outstanding | 1,340.6 | 1,331.8 | 1,338.8 | 1,330.5 | | Diluted weighted average number of shares outstanding | 1,354.0 | 1,342.1 | 1,352.9 | 1,339.7 | | Basic EPS | $1.24 | $0.08 | $2.38 | $1.37 | | Diluted EPS | $1.22 | $0.08 | $2.36 | $1.36 | - The computation of diluted EPS excluded **1.8 million** and **2.5 million** stock awards for the quarter and six months ended June 30, 2025, respectively, due to their anti-dilutive effect[33](index=33&type=chunk) [Note 5: Changes in Contract Estimates at Completion](index=11&type=section&id=Note%205%3A%20Changes%20in%20Contract%20Estimates%20at%20Completion) Net EAC adjustments unfavorably impacted Q2 2025 operating profit by $117 million, with a significant $0.6 billion charge recognized in Q2 2024 - Changes in estimates on contracts are recognized on a **cumulative catch-up basis**[35](index=35&type=chunk) - During Q2 2024, Raytheon recognized a **$0.6 billion charge** related to the termination of a fixed-price development contract[37](index=37&type=chunk) **Impact of Net EAC Adjustments (dollars in millions, except per share amounts):** | Metric | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total net sales | $(99) | $3 | $(145) | $(15) | | Operating profit | $(117) | $(62) | $(275) | $(224) | | Income attributable to common shareowners | $(92) | $(49) | $(217) | $(177) | | Diluted EPS attributable to common shareowners | $(0.07) | $(0.04) | $(0.16) | $(0.13) | [Note 6: Accounts Receivable, Net](index=12&type=section&id=Note%206%3A%20Accounts%20Receivable%2C%20Net) Net accounts receivable increased to $12.385 billion as of June 30, 2025, from $10.976 billion at year-end 2024 **Accounts Receivable, Net (dollars in millions):** | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Accounts receivable | $12,722 | $11,265 | | Allowance for expected credit losses | $(337) | $(289) | | **Total accounts receivable, net** | **$12,385** | **$10,976** | [Note 7: Contract Assets and Liabilities](index=12&type=section&id=Note%207%3A%20Contract%20Assets%20and%20Liabilities) Net contract liabilities decreased to $3.5 billion, with changes primarily driven by activity at Pratt & Whitney **Contract Assets and Liabilities (dollars in millions):** | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Contract assets, net | $15,686 | $14,570 | | Contract liabilities | $(19,186) | $(18,616) | | **Net contract liabilities** | **$(3,500)** | **$(4,046)** | - Contract assets increased **$1.1 billion** primarily due to sales in excess of billings at Pratt & Whitney[39](index=39&type=chunk) - Contract liabilities increased **$0.6 billion** primarily due to advances received and billings in excess of sales at Pratt & Whitney[39](index=39&type=chunk) - The allowance for expected credit losses on contract assets increased to **$0.7 billion** from $0.5 billion, mainly due to a customer bankruptcy at Pratt & Whitney[40](index=40&type=chunk) [Note 8: Inventory, net](index=12&type=section&id=Note%208%3A%20Inventory%2C%20net) Net inventory increased to $14.012 billion as of June 30, 2025, from $12.768 billion at year-end 2024 **Inventory, Net (dollars in millions):** | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Raw materials | $4,559 | $4,164 | | Work-in-process | $4,822 | $4,493 | | Finished goods | $4,631 | $4,111 | | **Total inventory, net** | **$14,012** | **$12,768** | [Note 9: Borrowings and Lines of Credit](index=12&type=section&id=Note%209%3A%20Borrowings%20and%20Lines%20of%20Credit) RTX maintained access to a $5.0 billion credit facility and had $1.4 billion in commercial paper outstanding as of June 30, 2025 - As of June 30, 2025, RTX had a **$5.0 billion** revolving credit agreement with no outstanding borrowings[42](index=42&type=chunk) - RTX had **$1.4 billion** of commercial paper borrowings outstanding at June 30, 2025, with a weighted-average interest rate of **4.7%**[43](index=43&type=chunk) - The average maturity of RTX's long-term debt as of June 30, 2025, is approximately **12 years**[46](index=46&type=chunk) **Long-Term Debt Repayments (dollars in millions):** | Date | Description of Notes | Aggregate Principal Balance | | :--- | :--- | :--- | | May 7, 2025 | 3 Month SOFR plus 1.225% term loan due 2025 | $750 | [Note 10: Employee Benefit Plans](index=14&type=section&id=Note%2010%3A%20Employee%20Benefit%20Plans) Contributions to defined contribution plans were $741 million for the first half of 2025, with changes in pension assets and liabilities noted **Contributions to Plans (dollars in millions):** | Plan Type | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | U.S. qualified defined benefit plans | — | — | — | — | | International defined benefit plans | $11 | $10 | $14 | $12 | | PRB plans | $1 | $4 | $11 | $13 | | Defined contribution plans | $340 | $339 | $741 | $734 | **Balance Sheet Recognition (dollars in millions):** | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Non-current pension assets | $2,358 | $1,819 | | Current pension and PRB liabilities | $257 | $256 | | Future pension and postretirement benefit obligations | $2,038 | $2,104 | **Net Periodic Pension Income (dollars in millions):** | Component | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total net periodic pension income | $(310) | $(327) | $(636) | $(666) | [Note 11: Income Taxes](index=15&type=section&id=Note%2011%3A%20Income%20Taxes) The Q2 2025 effective tax rate was 15.4%, a significant decrease from 59.1% in the prior year due to a tax benefit and absence of a prior-year charge **Effective Income Tax Rate:** | Period | 2025 | 2024 | | :--- | :--- | :--- | | Quarter Ended June 30 | 15.4% | 59.1% | | Six Months Ended June 30 | 16.2% | 15.8% | - The Q2 2025 effective tax rate includes a **$33 million tax benefit** from the conclusion of an IRS examination for RTX's 2020 tax year[50](index=50&type=chunk) - The Q2 2024 effective tax rate included the impact of a **$918 million charge** for which no related tax benefit was recorded[50](index=50&type=chunk) - RTX is disputing certain IRS proposed adjustments for tax years 2017-2019 at the Appeals Division of the IRS[53](index=53&type=chunk) [Note 12: Financial Instruments](index=16&type=section&id=Note%2012%3A%20Financial%20Instruments) RTX uses derivative instruments for risk management, with the notional principal of foreign currency hedges increasing to $21 billion - RTX uses derivative instruments to manage **foreign currency, interest rate, and commodity price exposures**[55](index=55&type=chunk) - The aggregate notional principal of outstanding foreign currency hedges was **$21 billion** at June 30, 2025, up from $17 billion at year-end 2024[56](index=56&type=chunk) - During Q2 2025, the Company entered into forward exchange contracts to partially hedge its net investment in certain foreign subsidiaries[57](index=57&type=chunk) [Note 13: Fair Value Measurements](index=16&type=section&id=Note%2013%3A%20Fair%20Value%20Measurements) RTX measures certain assets and liabilities at fair value, with derivative instruments primarily valued using Level 2 inputs **Recurring Fair Value Measurements (dollars in millions) - June 30, 2025:** | Metric | Total | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Marketable securities held in trusts | $679 | $609 | $70 | — | | Derivative assets | $490 | — | $490 | — | | Derivative liabilities | $307 | — | $307 | — | **Recurring Fair Value Measurements (dollars in millions) - December 31, 2024:** | Metric | Total | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Marketable securities held in trusts | $786 | $721 | $65 | — | | Derivative assets | $187 | — | $187 | — | | Derivative liabilities | $451 | — | $451 | — | **Fair Value of Long-Term Debt (excluding finance leases) (dollars in millions):** | Date | Carrying Amount | Fair Value | | :--- | :--- | :--- | | June 30, 2025 | $40,262 | $37,877 | | December 31, 2024 | $40,991 | $37,956 | - The fair value of long-term debt is primarily classified as **Level 2** ($35,845 million at June 30, 2025) within the fair value hierarchy[63](index=63&type=chunk) [Note 14: Variable Interest Entities](index=17&type=section&id=Note%2014%3A%20Variable%20Interest%20Entities) Pratt & Whitney consolidates IAE and IAE LLC as variable interest entities, with total assets of $12.739 billion as of June 30, 2025 - Pratt & Whitney consolidates International Aero Engines AG (IAE) and International Aero Engines, LLC (IAE LLC) as **variable interest entities**[64](index=64&type=chunk) **Consolidated Variable Interest Entities (dollars in millions):** | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Current assets | $11,611 | $10,315 | | Non-current assets | $1,128 | $1,060 | | **Total assets** | **$12,739** | **$11,375** | | Current liabilities | $14,130 | $13,595 | | Non-current liabilities | $123 | $140 | | **Total liabilities** | **$14,253** | **$13,735** | [Note 15: Guarantees](index=18&type=section&id=Note%2015%3A%20Guarantees) RTX provides various financial and performance guarantees, with the carrying amount of warranties increasing to $1.044 billion - The carrying amount of liabilities related to obligations from sales of certain businesses was **$0.1 billion** at June 30, 2025[67](index=67&type=chunk) **Outstanding Financial Guarantees (dollars in millions):** | Type | June 30, 2025 Maximum Potential Payment | June 30, 2025 Carrying Amount of Liability | Dec 31, 2024 Maximum Potential Payment | Dec 31, 2024 Carrying Amount of Liability | | :--- | :--- | :--- | :--- | :--- | | Commercial aerospace financing arrangements | $211 | — | $274 | — | | Third party guarantees | $44 | — | $79 | $1 | **Changes in Service and Product Warranties and Performance Guarantees (dollars in millions):** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Balance as of January 1 | $993 | $1,091 | | Warranties and performance guarantees issued | $152 | $134 | | Settlements | $(108) | $(152) | | Other | $7 | $(5) | | **Balance as of June 30** | **$1,044** | **$1,068** | [Note 16: Commitments and Contingencies](index=19&type=section&id=Note%2016%3A%20Commitments%20and%20Contingencies) RTX faces various commitments and contingencies, including environmental remediation, legal matters, and impacts from the Powder Metal issue - RTX has **$0.8 billion** reserved for environmental remediation as of June 30, 2025[71](index=71&type=chunk) - Commercial aerospace financing and other contractual commitments totaled approximately **$13.6 billion** as of June 30, 2025[72](index=72&type=chunk) - Standby letters of credit and surety bonds totaled **$3.9 billion** as of June 30, 2025[74](index=74&type=chunk) - Aggregate outstanding notional value of industrial cooperation agreements was approximately **$11.5 billion** at June 30, 2025[75](index=75&type=chunk) - Pratt & Whitney faces three Cost Accounting Standards (CAS) claims totaling approximately **$2.0 billion** plus interest, which the company believes are without merit[86](index=86&type=chunk)[87](index=87&type=chunk) - In 2024, RTX resolved several legal matters with penalties and settlements totaling **$1.004 billion**[88](index=88&type=chunk)[89](index=89&type=chunk) - RTX entered into a Consent Agreement with the Department of State to resolve export control violations, including a **$200 million** civil penalty[90](index=90&type=chunk) - The Pratt & Whitney Powder Metal Matter requires accelerated fleet inspection, with accrued liabilities for customer compensation at **$1.1 billion** as of June 30, 2025[80](index=80&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - The UTC Equity Conversion Litigation was concluded in the Company's favor in May 2025[92](index=92&type=chunk) - The class action lawsuit regarding employee hiring practices was concluded in May 2025 after all defendants reached a settlement[93](index=93&type=chunk) - RTX is cooperating with an SEC investigation related to the Powder Metal Matter[96](index=96&type=chunk) [Note 17: Equity](index=25&type=section&id=Note%2017%3A%20Equity) Accumulated Other Comprehensive Loss decreased to $(2,391) million, driven by foreign currency translation and hedging gains **Changes in Accumulated Other Comprehensive Loss (AOCL), net of tax (dollars in millions) - Six Months Ended June 30, 2025:** | Component | Foreign Currency Translation | Defined Benefit Pension and Postretirement Plans | Unrealized Hedging Gains (Losses) | Accumulated Other Comprehensive Loss | | :--- | :--- | :--- | :--- | :--- | | Balance at December 31, 2024 | $(949) | $(2,679) | $(127) | $(3,755) | | Other comprehensive income (loss) before reclassifications, net | $1,362 | $(179) | $259 | $1,442 | | Amounts reclassified, pre-tax | — | $(77) | $23 | $(54) | | Tax benefit (expense) | $1 | $39 | $(64) | $(24) | | **Balance at June 30, 2025** | **$414** | **$(2,896)** | **$91** | **$(2,391)** | **Changes in Accumulated Other Comprehensive Loss (AOCL), net of tax (dollars in millions) - Six Months Ended June 30, 2024:** | Component | Foreign Currency Translation | Defined Benefit Pension and Postretirement Plans | Unrealized Hedging Gains (Losses) | Accumulated Other Comprehensive Loss | | :--- | :--- | :--- | :--- | :--- | | Balance at December 31, 2023 | $(440) | $(2,026) | $47 | $(2,419) | | Other comprehensive income (loss) before reclassifications, net | $(189) | $(10) | $(61) | $(260) | | Amounts reclassified, pre-tax | — | $(87) | $9 | $(78) | | Tax benefit (expense) | $(3) | $21 | $21 | $39 | | **Balance at June 30, 2024** | **$(632)** | **$(2,102)** | **$16** | **$(2,718)** | [Note 18: Segment Financial Data](index=25&type=section&id=Note%2018%3A%20Segment%20Financial%20Data) Total segment net sales and operating profit increased for the first half of 2025, driven by strong performance across all segments - RTX's operations are classified into three principal segments: **Collins Aerospace, Pratt & Whitney, and Raytheon**[103](index=103&type=chunk)[104](index=104&type=chunk) **Total Segment Net Sales (dollars in millions):** | Segment | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Collins Aerospace | $7,622 | $6,999 | $14,839 | $13,672 | | Pratt & Whitney | $7,631 | $6,802 | $14,997 | $13,258 | | Raytheon | $7,001 | $6,511 | $13,341 | $13,170 | | **Total segment** | **$22,254** | **$20,312** | **$43,177** | **$40,100** | **Total Segment Operating Profit (dollars in millions):** | Segment | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Collins Aerospace | $1,173 | $1,118 | $2,261 | $1,967 | | Pratt & Whitney | $492 | $542 | $1,072 | $954 | | Raytheon | $805 | $127 | $1,483 | $1,123 | | **Total segment** | **$2,470** | **$1,787** | **$4,816** | **$4,044** | **Segment Sales Disaggregated by Geographic Region (Six Months Ended June 30, 2025, dollars in millions):** | Region | Collins Aerospace | Pratt & Whitney | Raytheon | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | United States | $6,862 | $6,678 | $9,356 | $107 | $23,003 | | Europe | $3,480 | $3,378 | $1,759 | $1 | $8,618 | | Asia Pacific | $1,760 | $3,111 | $1,131 | — | $6,002 | | Middle East and North Africa | $510 | $325 | $917 | — | $1,752 | | Other regions | $904 | $1,504 | $104 | — | $2,512 | | **Consolidated net sales** | **$13,516** | **$14,996** | **$13,267** | **$108** | **$41,887** | **Segment Sales Disaggregated by Type of Customer (Six Months Ended June 30, 2025, dollars in millions):** | Customer Type | Collins Aerospace | Pratt & Whitney | Raytheon | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Sales to the U.S. government | $3,511 | $3,055 | $9,335 | $104 | $16,005 | | Foreign military sales through the U.S. government | $220 | $783 | $2,103 | — | $3,106 | | Foreign government direct commercial sales | $648 | $328 | $1,808 | $1 | $2,785 | | Commercial aerospace and other commercial sales | $9,137 | $10,830 | $21 | $3 | $19,991 | | **Consolidated net sales** | **$13,516** | **$14,996** | **$13,267** | **$108** | **$41,887** | **Segment Sales Disaggregated by Sales Type (Six Months Ended June 30, 2025, dollars in millions):** | Sales Type | Collins Aerospace | Pratt & Whitney | Raytheon | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Products | $10,518 | $8,155 | $11,381 | $88 | $30,142 | | Services | $2,998 | $6,841 | $1,886 | $20 | $11,745 | | **Consolidated net sales** | **$13,516** | **$14,996** | **$13,267** | **$108** | **$41,887** | [Note 19: Remaining Performance Obligations (RPO)](index=30&type=section&id=Note%2019%3A%20Remaining%20Performance%20Obligations%20%28RPO%29) Total RPO was approximately $236 billion as of June 30, 2025, with 25% expected to be recognized as revenue in the next 12 months - Total RPO was approximately **$236 billion** as of June 30, 2025[123](index=123&type=chunk) - Approximately **25%** of the total RPO is expected to be recognized as revenue over the next 12 months[123](index=123&type=chunk) - Approximately **45%** of RPO relates to long-term commercial aerospace maintenance contracts at Pratt & Whitney[123](index=123&type=chunk) [Note 20: Accounting Pronouncements](index=30&type=section&id=Note%2020%3A%20Accounting%20Pronouncements) RTX is evaluating the impact of two new FASB Accounting Standards Updates related to income statement and income tax disclosures - ASU 2024-03, Disaggregation of Income Statement Expenses, requires tabular disclosure of natural expense categories and is effective after December 15, 2026[124](index=124&type=chunk) - ASU 2023-09, Improvements to Income Tax Disclosures, enhances income tax reporting and is effective for fiscal years beginning after December 15, 2024[125](index=125&type=chunk) - RTX is currently evaluating the impact of these new pronouncements on its disclosures[124](index=124&type=chunk)[125](index=125&type=chunk) [Report of Independent Registered Public Accounting Firm](index=32&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - PricewaterhouseCoopers LLP (PwC) reviewed the interim financial information and is not aware of any material modifications needed for conformity with U.S. GAAP[129](index=129&type=chunk) - PwC's review is substantially less in scope than an audit, and thus, no opinion is expressed on the interim financial information[131](index=131&type=chunk) - PwC previously audited the consolidated financial statements as of December 31, 2024, and expressed an unqualified opinion[130](index=130&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on RTX's financial condition, results of operations, and key business developments [BUSINESS OVERVIEW](index=33&type=section&id=BUSINESS%20OVERVIEW) RTX's 2025 business environment is influenced by supply chain disruptions, inflation, geopolitical conflicts, and government policies - RTX is a global premier systems provider of high technology products and services to the aerospace and defense industries[134](index=134&type=chunk) - Significant factors affecting the business in 2025 include **global supply chain disruptions, inflation, geopolitical conflicts, and U.S. government policy changes**[142](index=142&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - In 2024, RTX resolved several legal matters, including government investigations and export control violations[143](index=143&type=chunk)[144](index=144&type=chunk) - The **Pratt & Whitney Powder Metal Matter** continues to require accelerated inspection of the PW1100G-JM GTF fleet through 2026[146](index=146&type=chunk) - The IAM work stoppage at Pratt & Whitney ended on May 27, 2025, with full production resuming in June 2025[148](index=148&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=36&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) There have been no significant changes in critical accounting estimates during the six months ended June 30, 2025 - Preparation of financial statements requires management to make estimates and assumptions, with the most complex judgments arising from inherently uncertain matters[164](index=164&type=chunk) - There have been **no significant changes** in critical accounting estimates during the six months ended June 30, 2025[164](index=164&type=chunk) [RESULTS OF OPERATIONS](index=36&type=section&id=RESULTS%20OF%20OPERATIONS) RTX reported strong financial performance, with significant increases in net sales and operating profit driven by organic growth and absence of prior-year charges - RTX provides organic change in Net sales and Operating profit (non-GAAP measures) to offer transparency into underlying business performance[167](index=167&type=chunk)[168](index=168&type=chunk) [Net Sales](index=37&type=section&id=Net%20Sales) Total net sales increased by 9.4% for the quarter and 7.3% for the six months, driven by organic growth across all segments **Total Net Sales (dollars in millions):** | Period | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Quarter Ended June 30 | $21,581 | $19,721 | $1,860 | 9.4% | | Six Months Ended June 30 | $41,887 | $39,026 | $2,861 | 7.3% | **Factors Contributing to Change in Total Net Sales (dollars in millions):** | Factor | Quarter Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Organic | $1,783 | $3,304 | | Acquisitions and divestitures, net | $(30) | $(522) | | Other | $107 | $79 | | **Total change** | **$1,860** | **$2,861** | - **Organic net sales** increased by $1.8 billion for the quarter and $3.3 billion for the six months, primarily due to higher sales at all segments[171](index=171&type=chunk)[172](index=172&type=chunk) **Net Sales by Type (dollars in millions):** | Type | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Products | $15,551 | $14,562 | $30,142 | $28,865 | | Services | $6,030 | $5,159 | $11,745 | $10,161 | **Sales to Major Customers (dollars in millions):** | Customer Type | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales to the U.S. government | $8,273 | $8,052 | $16,005 | $16,179 | | Foreign military sales through the U.S. government | $1,635 | $1,269 | $3,106 | $2,518 | | Foreign government direct commercial sales | $1,433 | $1,171 | $2,785 | $2,379 | | Commercial aerospace and other commercial sales | $10,240 | $9,229 | $19,991 | $17,950 | [Cost of Sales](index=38&type=section&id=Cost%20of%20Sales) Total cost of sales increased due to higher sales volumes, partially offset by the absence of significant prior-year charges **Total Cost of Sales (dollars in millions):** | Period | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Quarter Ended June 30 | $17,205 | $16,141 | $1,064 | 6.6% | | Six Months Ended June 30 | $33,395 | $31,885 | $1,510 | 4.7% | | Percentage of net sales (Qtr) | 79.7% | 81.8% | | | | Percentage of net sales (6M) | 79.7% | 81.7% | | | **Factors Contributing to Change in Total Cost of Sales (dollars in millions):** | Factor | Quarter Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Organic | $1,510 | $2,579 | | Acquisitions and divestitures, net | $(23) | $(471) | | Restructuring | $13 | $57 | | FAS/CAS operating adjustment | $28 | $58 | | Acquisition accounting adjustments | $(18) | $(46) | | Other | $(446) | $(667) | | **Total change** | **$1,064** | **$1,510** | - **Organic increase** in total cost of sales was $1.5 billion for the quarter and $2.6 billion for the six months, driven by higher sales volumes[182](index=182&type=chunk)[184](index=184&type=chunk) - Other cost of sales decreased primarily due to the absence of a **$0.5 billion charge** for the Raytheon Contract Termination and **$0.2 billion** in charges at Collins in 2024[183](index=183&type=chunk)[185](index=185&type=chunk) **Cost of Sales by Type (dollars in millions):** | Type | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Products | $12,989 | $12,625 | $25,272 | $24,841 | | Services | $4,216 | $3,516 | $8,123 | $7,044 | [Research and Development](index=40&type=section&id=Research%20and%20Development) Company-funded R&D remained consistent, while customer-funded R&D increased due to military and commercial programs **Research and Development (dollars in millions):** | Type | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Company-funded | $697 | $706 | $1,334 | $1,375 | | Customer-funded | $1,247 | $1,186 | $2,447 | $2,422 | - **Company-funded R&D** expenses were relatively consistent year-over-year[193](index=193&type=chunk) - **Customer-funded R&D** expenses increased by $0.1 billion for the quarter, driven by higher expenses at Collins and Pratt & Whitney[194](index=194&type=chunk) [Selling, General, and Administrative](index=40&type=section&id=Selling%2C%20General%2C%20and%20Administrative) SG&A expenses increased primarily due to a charge at Pratt & Whitney related to a customer bankruptcy and higher restructuring costs **Selling, General, and Administrative (dollars in millions):** | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Quarter Ended June 30 | $1,573 | $1,449 | $124 | | Six Months Ended June 30 | $3,021 | $2,843 | $178 | | Percentage of net sales (Qtr) | 7.3% | 7.3% | | | Percentage of net sales (6M) | 7.2% | 7.3% | | - The increase in SG&A for the quarter was primarily driven by a **$0.1 billion charge** at Pratt & Whitney related to a customer bankruptcy[196](index=196&type=chunk) - The six-month increase was due to the customer bankruptcy charge and **$0.1 billion** of higher restructuring costs at Collins[197](index=197&type=chunk) [Other Income (Expense), Net](index=41&type=section&id=Other%20Income%20%28Expense%29%2C%20Net) Other income increased significantly due to the absence of a $0.9 billion charge for legal matters recorded in Q2 2024 **Other Income (Expense), Net (dollars in millions):** | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Quarter Ended June 30 | $40 | $(896) | $936 | | Six Months Ended June 30 | $44 | $(524) | $568 | - The quarterly increase was primarily due to the absence of a **$0.9 billion charge** recorded in Q2 2024 related to legal matters[200](index=200&type=chunk) - The six-month increase was partially offset by the absence of a **$0.4 billion gain** on the sale of the CIS business in Q1 2024[201](index=201&type=chunk) [Operating Profit](index=41&type=section&id=Operating%20Profit) Operating profit surged by 305.7% for the quarter, driven by improved segment performance and the absence of major prior-year charges **Operating Profit (dollars in millions):** | Period | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Quarter Ended June 30 | $2,146 | $529 | $1,617 | 305.7% | | Six Months Ended June 30 | $4,181 | $2,399 | $1,782 | 74.3% | | Operating profit margin (Qtr) | 9.9% | 2.7% | | | | Operating profit margin (6M) | 10.0% | 6.1% | | | - The quarterly increase was driven by segment performance and the absence of a **$0.9 billion** legal charge and a **$0.6 billion** contract termination charge from Q2 2024[202](index=202&type=chunk) - The six-month increase was driven by a **$0.7 billion** increase in segment operating performance and the absence of prior year charges[203](index=203&type=chunk) [Non-service Pension Income](index=41&type=section&id=Non-service%20Pension%20Income) Non-service pension income remained relatively consistent compared to the prior year **Non-service Pension Income (dollars in millions):** | Period | 2025 | 2024 | | :--- | :--- | :--- | | Quarter Ended June 30 | $(351) | $(374) | | Six Months Ended June 30 | $(717) | $(760) | [Interest Expense, Net](index=42&type=section&id=Interest%20Expense%2C%20Net) Net interest expense remained relatively consistent year-over-year **Interest Expense, Net (dollars in millions):** | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Quarter Ended June 30 | $457 | $475 | $(18) | | Six Months Ended June 30 | $900 | $880 | $20 | | Average interest expense rate (Qtr) | 4.5% | 4.6% | | | Average interest expense rate (6M) | 4.5% | 4.6% | | - Interest expense, net, for the quarter and six months was **relatively consistent** with the prior year[206](index=206&type=chunk) - The six-month increase was primarily due to the reversal of interest accruals from tax audit conclusions in H1 2024[207](index=207&type=chunk) [Income Taxes](index=42&type=section&id=Income%20Taxes) The Q2 2025 effective tax rate was 15.4%, a significant decrease from 59.1% in the prior year due to a tax benefit and absence of a prior-year charge **Effective Income Tax Rate:** | Period | 2025 | 2024 | | :--- | :--- | :--- | | Quarter Ended June 30 | 15.4% | 59.1% | | Six Months Ended June 30 | 16.2% | 15.8% | - The Q2 2025 effective tax rate includes a **$33 million tax benefit** from the conclusion of an IRS examination[209](index=209&type=chunk) - The Q2 2024 effective tax rate included the impact of a **$918 million charge** for which no related tax benefit was recorded[209](index=209&type=chunk) [Net Income Attributable to Common Shareowners](index=42&type=section&id=Net%20Income%20Attributable%20to%20Common%20Shareowners) Net income and diluted EPS increased significantly, reflecting improved operating performance and the absence of substantial prior-year charges **Net Income Attributable to Common Shareowners (dollars in millions, except per share amounts):** | Metric | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to common shareowners | $1,657 | $111 | $3,192 | $1,820 | | Diluted earnings per share | $1.22 | $0.08 | $2.36 | $1.36 | - Net income for Q2 2025 included unfavorable impacts from acquisition accounting adjustments of **$0.4 billion** (diluted EPS of $0.28)[212](index=212&type=chunk) - Net income for H1 2024 included unfavorable impacts from a **$0.9 billion** legal charge and a **$0.4 billion** contract termination charge[213](index=213&type=chunk)[219](index=219&type=chunk) [SEGMENT REVIEW](index=43&type=section&id=SEGMENT%20REVIEW) All segments reported organic sales growth, driving a significant increase in total segment operating profit, with strong defense bookings - Total backlog was **$236 billion** as of June 30, 2025, up from $218 billion at year-end 2024[226](index=226&type=chunk) - Defense bookings were approximately **$12 billion** for the quarter and **$21 billion** for the six months ended June 30, 2025[227](index=227&type=chunk) - The change in net EAC adjustments was primarily due to unfavorable changes across businesses, with no single significant driver[224](index=224&type=chunk) **Net EAC Adjustments (dollars in millions):** | Period | 2025 | 2024 | | :--- | :--- | :--- | | Quarter Ended June 30 | $(117) | $(62) | | Six Months Ended June 30 | $(275) | $(224) | [Collins Aerospace](index=45&type=section&id=Collins%20Aerospace) Collins Aerospace reported a 9% increase in net sales, driven by higher commercial aftermarket and defense sales **Collins Aerospace Financial Performance (dollars in millions):** | Metric | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $7,622 | $6,999 | 9% | $14,839 | $13,672 | 9% | | Operating profit | $1,173 | $1,118 | 5% | $2,261 | $1,967 | 15% | | Operating profit margins | 15.4% | 16.0% | | 15.2% | 14.4% | | - **Organic net sales** increased by $0.6 billion for the quarter, driven by higher commercial aftermarket and defense sales[232](index=232&type=chunk) - **Organic operating profit** increased by $0.1 billion for the quarter, primarily due to higher defense volume and favorable mix[233](index=233&type=chunk) - **Organic net sales** increased by $1.2 billion for the six months, driven by higher commercial aftermarket and defense sales[236](index=236&type=chunk) - **Organic operating profit** increased by $0.3 billion for the six months, driven by higher commercial aftermarket and defense volume[237](index=237&type=chunk) - Other operating profit for the six months increased due to the absence of **$0.2 billion** in Q1 2024 charges related to alternative titanium sources[238](index=238&type=chunk) - Collins booked **$358 million** for the U.S. Navy's Very Low Frequency communication subsystem in the first half of 2025[240](index=240&type=chunk) [Pratt & Whitney](index=46&type=section&id=Pratt%20%26%20Whitney) Pratt & Whitney's net sales increased by 12% for the quarter, driven by higher commercial aftermarket and OEM sales **Pratt & Whitney Financial Performance (dollars in millions):** | Metric | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $7,631 | $6,802 | 12% | $14,997 | $13,258 | 13% | | Operating profit | $492 | $542 | (9)% | $1,072 | $954 | 12% | | Operating profit margins | 6.4% | 8.0% | | 7.1% | 7.2% | | - **Organic net sales** increased by $0.8 billion for the quarter, reflecting higher commercial aftermarket and OEM sales[244](index=244&type=chunk) - **Organic operating profit** increased by $0.1 billion for the quarter, driven by higher commercial aftermarket volume and favorable OEM mix[245](index=245&type=chunk) - Other operating profit decreased by **$0.1 billion** for the quarter, primarily due to a charge related to a customer bankruptcy[246](index=246&type=chunk) - **Organic net sales** increased by $1.7 billion for the six months, reflecting higher commercial aftermarket and OEM sales[250](index=250&type=chunk) - **Organic operating profit** increased by $0.2 billion for the six months, driven by higher commercial aftermarket volume and lower R&D expenses[251](index=251&type=chunk) - Pratt & Whitney booked **$541 million** for F135 sustainment in the first half of 2025[252](index=252&type=chunk) [Raytheon](index=47&type=section&id=Raytheon) Raytheon's net sales increased by 8% for the quarter, with operating profit surging 534% due to higher volume and absence of a prior-year charge **Raytheon Financial Performance (dollars in millions):** | Metric | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $7,001 | $6,511 | 8% | $13,341 | $13,170 | 1% | | Operating profit | $805 | $127 | 534% | $1,483 | $1,123 | 32% | | Operating profit margins | 11.5% | 2.0% | | 11.1% | 8.5% | | **Raytheon Defense Bookings (dollars in millions):** | Period | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Quarter Ended June 30 | $9,399 | $5,028 | $4,371 | 87% | | Six Months Ended June 30 | $13,795 | $13,150 | $645 | 5% | - **Organic net sales** increased by $0.4 billion for the quarter, primarily due to higher sales from international Patriot and NASAMS programs[256](index=256&type=chunk) - **Organic operating profit** increased by $0.1 billion for the quarter, driven by a favorable change in mix and higher volume[257](index=257&type=chunk) - Other operating profit increased due to the absence of a **$0.6 billion charge** related to the Raytheon Contract Termination in Q2 2024[258](index=258&type=chunk) - **Organic net sales** increased by $0.6 billion for the six months, primarily due to higher sales from international Patriot, NASAMS, and LTAMDS programs[261](index=261&type=chunk) - **Organic operating profit** increased by $0.2 billion for the six months, primarily due to a favorable change in mix and higher volume[262](index=262&type=chunk) - Raytheon's backlog was **$64 billion** as of June 30, 2025, with key quarterly bookings including $1.1 billion for AIM-9X and $1.8 billion on classified contracts[265](index=265&type=chunk) [Corporate and Eliminations and other](index=48&type=section&id=Corporate%20and%20Eliminations%20and%20other) Corporate expenses decreased significantly due to the absence of a $0.9 billion charge for legal matters from the prior year **Eliminations and other & Corporate expenses (dollars in millions):** | Metric | Quarter Ended June 30, 2025 Net Sales | Quarter Ended June 30, 2024 Net Sales | Quarter Ended June 30, 2025 Operating Profit | Quarter Ended June 30, 2024 Operating Profit | | :--- | :--- | :--- | :--- | :--- | | Eliminations and other | $(673) | $(591) | $24 | $(36) | | Corporate expenses and other unallocated items | — | — | $(47) | $(930) | | Metric | Six Months Ended June 30, 2025 Net Sales | Six Months Ended June 30, 2024 Net Sales | Six Months Ended June 30, 2025 Operating Profit | Six Months Ended June 30, 2024 Operating Profit | | :--- | :--- | :--- | :--- | :--- | | Eliminations and other | $(1,290) | $(1,074) | $36 | $(41) | | Corporate expenses and other unallocated items | — | — | $(85) | $(1,026) | - The change in eliminations and other operating profit was primarily due to a gain on an investment recognized in Q2 2025[268](index=268&type=chunk)[271](index=271&type=chunk) - The change in corporate expenses was primarily due to the absence of a **$0.9 billion charge** recorded in Q2 2024 related to legal matters[269](index=269&type=chunk)[272](index=272&type=chunk) [FAS/CAS operating adjustment](index=49&type=section&id=FAS%2FCAS%20operating%20adjustment) The FAS/CAS operating adjustment, representing the difference between GAAP and government accounting standards, remained relatively consistent - The FAS/CAS operating adjustment represents the difference between pension and PRB expense under U.S. GAAP (FAS) and U.S. government Cost Accounting Standards (CAS)[273](index=273&type=chunk) **FAS/CAS Operating Adjustment (dollars in millions):** | Component | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | FAS service cost (expense) | $(30) | $(34) | $(60) | $(69) | | CAS expense | $216 | $246 | $431 | $495 | | **FAS/CAS operating adjustment** | **$186** | **$212** | **$371** | **$426** | [Acquisition accounting adjustments](index=49&type=section&id=Acquisition%20accounting%20adjustments) Acquisition accounting adjustments, primarily amortization of acquired intangibles, remained relatively consistent year-over-year - Acquisition accounting adjustments include amortization of acquired intangible assets and are not part of management's segment evaluation[275](index=275&type=chunk) - Acquisition accounting adjustments for the quarter and six months were **relatively consistent** with the prior year[276](index=276&type=chunk) **Acquisition Accounting Adjustments (dollars in millions):** | Component | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Amortization of acquired intangibles | $(498) | $(516) | $(978) | $(1,022) | | Amortization of property, plant, and equipment fair value adjustment | $(8) | $(11) | $(17) | $(23) | | Amortization of customer contractual obligations related to acquired loss making and below-market contracts | $19 | $23 | $38 | $41 | | **Acquisition accounting adjustments** | **$(487)** | **$(504)** | **$(957)** | **$(1,004)** | [LIQUIDITY AND FINANCIAL CONDITION](index=50&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20CONDITION) RTX maintains strong liquidity with $4.8 billion in cash, though operating cash flows decreased due to higher accounts receivable and tax payments **Key Financial Metrics (dollars in millions):** | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,782 | $5,578 | | Total debt | $41,978 | $41,261 | | Total equity | $64,206 | $61,923 | | Total capitalization | $106,184 | $103,184 | | Total debt to total capitalization | 40% | 40% | - As of June 30, 2025, approximately **48%** of RTX's $4.8 billion cash was held by foreign subsidiaries[280](index=280&type=chunk) - RTX's Moody's outlook improved to **Baa1/stable** in March 2025, and S&P rating was affirmed at **BBB+/stable** in June 2025[281](index=281&type=chunk) - RTX has a **$5.0 billion** revolving credit agreement with no outstanding borrowings and **$1.4 billion** in commercial paper borrowings outstanding[282](index=282&type=chunk)[283](index=283&type=chunk) - RTX believes its cash on hand and access to credit markets will be sufficient to meet future operating cash needs[285](index=285&type=chunk) [Cash Flow - Operating Activities](index=51&type=section&id=Cash%20Flow%20-%20Operating%20Activities) Operating cash flows decreased by $1.3 billion, primarily due to an increase in accounts receivable and higher tax payments **Net Cash Flows Provided by Operating Activities (dollars in millions):** | Period | 2025 | 2024 | | :--- | :--- | :--- | | Six Months Ended June 30 | $1,763 | $3,075 | - The **$1.3 billion decrease** in operating cash flows was driven by an increase in accounts receivable and higher tax payments[288](index=288&type=chunk)[290](index=290&type=chunk) - Factoring activity resulted in a **$0.2 billion decrease** in cash provided by operating activities[289](index=289&type=chunk) - For the Powder Metal Matter, RTX estimates a full year 2025 cash impact of approximately **$1.1 billion to $1.3 billion**[291](index=291&type=chunk) [Cash Flow - Investing Activities](index=51&type=section&id=Cash%20Flow%20-%20Investing%20Activities) Net cash used in investing activities increased by $1.1 billion, primarily due to the absence of proceeds from the CIS business sale in the prior year **Net Cash Flows Used in Investing Activities (dollars in millions):** | Period | 2025 | 2024 | | :--- | :--- | :--- | | Six Months Ended June 30 | $(1,187) | $(40) | - The **$1.1 billion change** was primarily related to the sale of the CIS business in Q1 2024, which generated approximately **$1.3 billion** in cash proceeds[294](index=294&type=chunk) - Investments in other intangible assets increased, primarily due to collaboration and exclusivity payments[295](index=295&type=chunk) [Cash Flow - Financing Activities](index=51&type=section&id=Cash%20Flow%20-%20Financing%20Activities) Net cash used in financing activities decreased by $2.2 billion, driven by higher commercial paper issuance and lower debt repayments **Net Cash Flows Used in Financing Activities (dollars in millions):** | Period | 2025 | 2024 | | :--- | :--- | :--- | | Six Months Ended June 30 | $(1,409) | $(3,591) | - The **$2.2 billion change** was primarily driven by a $1.4 billion increase in commercial paper issuance and $0.9 billion lower long-term debt repayments[298](index=298&type=chunk) - RTX had remaining authority to repurchase approximately **$0.6 billion** of common stock under its share repurchase program[299](index=299&type=chunk) - The Board of Directors declared a dividend of **$0.68 per share** payable September 4, 2025[301](index=301&type=chunk) **Common Stock Repurchases (dollars in millions; shares in thousands):** | Period | 2025 $ | 2025 Shares | 2024 $ | 2024 Shares | | :--- | :--- | :--- | :--- | :--- | | Six Months Ended June 30 | $50 | 396 | $100 | 1,045 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There has been no significant change in the company's exposure to market risk during the first half of 2025 - There has been **no significant change** in RTX's exposure to market risk during the six months ended June 30, 2025[302](index=302&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - As of June 30, 2025, management concluded that the company's disclosure controls and procedures were **effective**[303](index=303&type=chunk) - There were **no material changes** in internal control over financial reporting during the quarter ended June 30, 2025[304](index=304&type=chunk) [PART II – OTHER INFORMATION](index=55&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 16 for a discussion of material legal proceedings, with no other material developments - For a discussion regarding material legal proceedings, refer to **"Note 16: Commitments and Contingencies"**[310](index=310&type=chunk) - Except as noted, there have been **no material developments** in legal proceedings[310](index=310&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the 2024 Annual Report - There have been **no material changes** from the risk factors disclosed in the 2024 Annual Report on Form 10-K[311](index=311&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) RTX did not repurchase any equity securities during the quarter ended June 30, 2025 - On October 21, 2023, the Board of Directors authorized a share repurchase program for up to **$11 billion** of common stock[314](index=314&type=chunk) - During the quarter ended June 30, 2025, RTX **did not repurchase shares** outside of the program[315](index=315&type=chunk) **Issuer Purchases of Equity Securities (Quarter Ended June 30, 2025):** | Period | Total Number of Shares Purchased (000's) | Average Price Paid per Share (dollars) | Total Number of Shares Purchased as Part of a Publicly Announced Program (000's) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (dollars in millions) | | :--- | :--- | :--- | :--- | :--- | | April 1 - April 30 | — | — | — | $615 | | May 1 - May 31 | — | — | — | $615 | | June 1 - June 30 | — | — | — | $615 | | **Total** | **—** | **—** | **—** | | [Item 5. Other Information](index=55&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[316](index=316&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including certifications and XBRL documents - The exhibits include certifications, Inline XBRL documents, and a letter regarding unaudited interim financial information[317](index=317&type=chunk) [SIGNATURES](index=57&type=section&id=SIGNATURES) - The report was signed on July 22, 2025, by the Executive Vice President and Chief Financial Officer, and the Corporate Vice President and Controller[320](index=320&type=chunk)

Group 1 - The aerospace & defense industry constitutes 20% of the overall portfolio of the analyst, with four holdings in this sector [1] - The companies mentioned include RTX, LHX, NOC, and GE, indicating a beneficial long position in these shares [1]

Core Insights - RTX Corporation's second-quarter 2025 adjusted earnings per share (EPS) of $1.56 exceeded the Zacks Consensus Estimate of $1.45 by 7.6% and improved 10.6% from the previous year's $1.41, driven by growth in adjusted operating profit [1][2] - The company reported GAAP earnings of $1.22 per share, a significant increase from 8 cents in the prior-year quarter [1] Operational Performance - RTX's second-quarter sales reached $21.58 billion, surpassing the Zacks Consensus Estimate of $20.53 billion by 5.1% and reflecting a 9.4% increase from $19.72 billion in the second quarter of 2024 [3] - Total costs and expenses rose 6.4% year over year to $19.48 billion, while adjusted operating profit increased to $2.79 billion from $2.56 billion in the prior-year quarter [4] Segmental Performance - Collins Aerospace: Sales totaled $7.62 billion, up 8.9% year over year, driven by higher commercial aftermarket and defense sales [5] - Pratt & Whitney: Sales reached $7.63 billion, reflecting a 12.2% improvement, attributed to growth in commercial aftermarket and OEM businesses [6] - Raytheon: Sales amounted to $7 billion, up 6.4% year over year, driven by increased sales volume for defense systems [7] Financial Update - As of June 30, 2025, RTX had cash and cash equivalents of $4.78 billion, down from $5.58 billion as of December 31, 2024 [8] - Long-term debt totaled $38.26 billion, a decrease from $38.73 billion at the end of 2024 [10] - Net cash flow from operating activities was $1.76 billion, compared to $3.08 billion at the end of June 2024, and free cash flow totaled $0.72 billion, down from $2.07 billion [10] Guidance - RTX updated its 2025 financial guidance, now expecting adjusted EPS in the range of $5.80-$5.95, down from $6.00-$6.15, with the Zacks Consensus Estimate at $5.93 [11] - The sales projection for 2025 was raised to $84.75-$85.50 billion from the previous guidance of $83-$84 billion, with the Zacks Consensus Estimate at $84.13 billion [12]

Financial Data and Key Metrics Changes - In Q2, adjusted sales reached $21.6 billion, reflecting a 9% increase on both an adjusted and organic basis, driven by growth across all channels [18] - Segment operating profit was $2.7 billion, up 12% year over year, with a consolidated segment margin expansion of 30 basis points [18] - Adjusted earnings per share (EPS) increased by 11% to $1.56, influenced by segment operating profit growth and a lower effective tax rate [18] - Free cash flow for the quarter was an outflow of $72 million, impacted by $250 million in powder metal-related compensation and $175 million from tariff impacts [19] Business Line Data and Key Metrics Changes - Collins reported sales of $7.6 billion, up 9%, with commercial aftermarket sales increasing by 13% and defense sales up 11% [24] - Pratt and Whitney's sales also reached $7.6 billion, up 12%, with commercial aftermarket sales rising by 19% and commercial OE sales by 15% [26] - Raytheon achieved sales of $7 billion, a 6% increase, driven by higher volume in land and air defense systems [28] Market Data and Key Metrics Changes - The company reported a book-to-bill ratio of 1.86, with a backlog now at $236 billion, up 15% year over year [6][30] - Global Revenue Passenger Kilometers (RPKs) are expected to grow over 5% for the year, supporting strong commercial aftermarket demand [8] - The U.S. defense budget reconciliation includes over $150 billion for additional defense spending, indicating strong demand for defense products [9] Company Strategy and Development Direction - The company is focused on executing its backlog, driving cost discipline, and investing in innovation [30] - Strategic partnerships are being formed in Europe to support production ramp-ups, particularly for defense systems [9][13] - The company is leveraging data analytics and AI to enhance productivity and operational efficiency across its operations [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand across end markets, with expectations for continued top-line growth [10] - The outlook for adjusted sales for the full year has been increased to a range of $84.75 billion to $85.5 billion, reflecting strong first-half performance [20] - The effective tax rate is expected to remain at 19.5% for the full year, with improvements in operating performance contributing to EPS growth [21] Other Important Information - The company raised its dividend by 8%, reflecting confidence in long-term cash generation capabilities [16] - The company is maintaining its full-year free cash flow outlook at $7 billion to $7.5 billion, with expected recovery from the work stoppage at Pratt [22] Q&A Session Summary Question: Can you discuss Raytheon's multiyear outlook and the potential for awards flowing from the backlog? - Management highlighted strong demand with a book-to-bill of 1.35 and a 25% increase in backlog since the end of 2023, indicating a robust multiyear growth outlook [35][36] Question: What are the updates on the tariff situation and its impact on demand? - The company has reduced its tariff outlook from $850 million to $500 million, with no current negative developments seen in demand, particularly in the commercial aftermarket [46][48] Question: Can you clarify the impact of the reconciliation bill on R&D capitalization? - The recent legislation restores full expensing of R&D costs, which is expected to provide a moderate cash benefit this year and continue to benefit in the following years [56][59] Question: What is the outlook for free cash flow in the coming years? - Management expressed confidence in achieving significant free cash flow growth, with expectations of $10 billion minimum in 2027 and beyond due to strong market conditions and operational improvements [98][102]