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Aerospace and defense company Raytheon (NYSE:RTX) reported Q2 CY2026 results , with sales up 14.5% year on year to $24.71 billion. The company’s full-year revenue guidance of $95.5 billion at the midpoint came in 1.5% above analysts’ estimates. Its non-GAAP profit of $1.89 per share was 13.7% above analysts’ consensus estimates.
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RTX (RTX) Q2 CY2026 Highlights:
・Revenue: $24.71 billion vs analyst estimates of $22.91 billion (14.5% year-on-year growth, 7.8% beat)
・Adjusted EPS: $1.89 vs analyst estimates of $1.66 (13.7% beat)
・The company lifted its revenue guidance for the full year to $95.5 billion at the midpoint from $93 billion, a 2.7% increase
・Management raised its full-year Adjusted EPS guidance to $7.18 at the midpoint, a 5.5% increase
・Operating Margin: 11.4%, up from 9.9% in the same quarter last year
・Free Cash Flow was $2.88 billion, up from -$72 million in the same quarter last year
・Market Capitalization: $262.4 billion
Company Overview
Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a variety of products and services to the aerospace and defense industries.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, RTX’s sales grew at a decent 8.3% compounded annual growth rate over the last five years. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. RTX’s annualized revenue growth of 9.6% over the last two years is above its five-year trend, suggesting its demand recently accelerated.
This quarter, RTX reported year-on-year revenue growth of 14.5%, and its $24.71 billion of revenue exceeded Wall Street’s estimates by 7.8%.
Looking ahead, sell-side analysts expect revenue to grow 4% over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and implies its products and services will face some demand challenges.
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Operating Margin
RTX has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.4%, higher than the broader industrials sector.
Looking at the trend in its profitability, RTX’s operating margin rose by 3.3 percentage points over the last five years, as its sales growth gave it operating leverage.
In Q2, RTX generated an operating margin profit margin of 11.4%, up 1.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
RTX’s EPS grew at 16.3% compounded annual growth rate over the last five years, higher than its 8.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into RTX’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, RTX’s operating margin expanded by 3.3 percentage points over the last five years. On top of that, its share count shrank by 5.4%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For RTX, its two-year annual EPS growth of 14.4% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.
In Q2, RTX reported adjusted EPS of $1.89, up from $1.56 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects RTX’s full-year EPS to grow 2.9% from $6.92 to $7.12.
Key Takeaways from RTX’s Q2 Results
This was a good beat and raise quarter. We were impressed by how significantly RTX blew past analysts’ revenue expectations this quarter. We were also glad its full-year EPS guidance trumped Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 5.2% to $204.90 immediately following the results.
RTX had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
