RTX (NYSE:RTX) remains on track to meet its 2026 financial outlook and expects sales, operating profit and free cash flow to grow in 2027, Chief Financial Officer Neil Mitchill said at a Baird conference.
Mitchill reaffirmed the aerospace and defense company’s forecast for 2026 sales of $97 billion to $97.5 billion, representing organic growth of 10% to 11%. RTX also continues to expect adjusted earnings of $7.65 to $7.75 per share and free cash flow of $9 billion to $9.2 billion.
RTX raised those forecasts on its third-quarter earnings call. Mitchill said demand remained strong across the company’s Pratt & Whitney, Collins Aerospace and Raytheon businesses, with a backlog of $340 billion.
“Our focus right now is squarely on execution,” he said. Delivering products will be central to fourth-quarter financial performance, while collections from customers will be the main factor in meeting the cash-flow outlook, he added.
2027 Growth Outlook
RTX plans to provide formal 2027 guidance on its January earnings call. Mitchill said he expects all three segments to deliver operating profit growth and margin expansion next year, although some one-time benefits will not recur.
Those include a 2026 benefit of $0.25 per share from IEEPA refunds. Mitchill also estimated that pension income would present a $0.30 to $0.35 per-share headwind in a rising interest-rate environment.
On cash flow, Mitchill expects a roughly $500 million tailwind as payments related to powder metal obligations decline. That will be largely offset by the absence of approximately $350 million in IEEPA refunds received in 2026 and a $100 million pension cash headwind. RTX also expects some working-capital growth and higher capital investment in 2027, but Mitchill said free cash flow should rise overall.
At Raytheon, slightly more than 80% of anticipated 2027 sales are in backlog, and at least 85% of that amount is fully funded, Mitchill said. He added that the funding provides support for deliveries even in an environment with a continuing resolution.
Munitions Contracts and Supply Chain
Mitchill said RTX has converted munitions framework agreements into binding undefinitized contracts, giving Raytheon and its suppliers visibility into demand over a 10-year period. Baird Senior Aerospace Defense Analyst Peter Arment said the four agreements could represent potentially $70 billion in contracts.
RTX has started investing in capacity and placed purchase orders for tooling and equipment. Mitchill said the agreements include protections if government funding, volumes or other terms change, allowing the company to recover investments under the contract terms.
Revenue will be recognized as costs are incurred, and a collaborative funding arrangement is expected to keep the contracts essentially cash-flow neutral until production. Over the longer term, Mitchill said the production phase could lift Raytheon’s margins above current levels through scale and efficiencies.
Supply-chain priorities include rocket motors and propulsion, castings and microelectronics. Mitchill said RTX has identified three new rocket motor suppliers expected to come on board over the next couple of years. Raytheon also added 150 alternative suppliers last year.
International demand remains a significant opportunity, he said. Raytheon booked $9 billion in international awards in the third quarter, and its international bookings through September were 2.5 times the level recorded in the same period of 2025.
Commercial Aftermarket and Engine Repairs
Mitchill said RTX has not seen changes in airline customer buying behavior in the fourth quarter, although the company is monitoring jet fuel prices and consumer and airline behavior. Commercial aftermarket sales grew 16% organically over the first nine months of 2026, he said.
Pratt & Whitney’s geared turbofan shop visits are sold out through 2027, while RTX expects about 800 V2500 engine shop visits next year, roughly matching 2026. Mitchill said V2500 overhaul content should increase as more engines undergo heavier overhauls.
Maintenance, repair and overhaul output for the PW1100 geared turbofan rose 35% in the third quarter and about 30% year to date, Mitchill said. He expects aircraft-on-ground levels to decline in the fourth quarter and continue trending down in 2027.
Capital Allocation
Mitchill said investment in the business remains RTX’s first priority, with research and development and capital spending expected to exceed $10 billion this year. The company also plans to continue growing its dividend and pay down debt taken on for an accelerated share repurchase.
RTX will consider bolt-on technology acquisitions and some portfolio pruning, he said, while continuing to return capital to shareholders over the long term.
About RTX (NYSE:RTX)
RTX Corporation is an aerospace and defense company whose businesses include Collins Aerospace, Pratt & Whitney and Raytheon. The company serves commercial aviation, military and government customers around the world. Collins Aerospace develops aircraft systems and components, including avionics, communications, flight controls and cabin equipment. Pratt & Whitney designs and manufactures aircraft engines and provides related maintenance services. Raytheon develops defense systems and technologies, including air and missile defense, sensors and precision weapons.
