Aerospace and defense company Raytheon (NYSE: RTX) announced better-than-expected revenue in Q3 2026, with sales up 11.1% year on year to $24.97 billion. The company’s full-year revenue guidance of $97.25 billion at the midpoint came in 1.1% above analysts’ estimates. Its non-GAAP profit of $2.26 per share was 27% above analysts’ consensus estimates.
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RTX (RTX) Q3 2026 Highlights:
- Revenue: $24.97 billion vs analyst estimates of $24.16 billion (11.1% year-on-year growth, 3.3% beat)
- Adjusted EPS: $2.26 vs analyst estimates of $1.78 (27% beat)
- The company lifted its revenue guidance for the full year to $97.25 billion at the midpoint from $95.5 billion, a 1.8% increase
- Management raised its full-year Adjusted EPS guidance to $7.70 at the midpoint, a 7.3% increase
- Operating Margin: 13.4%, up from 11.2% in the same quarter last year
- Free Cash Flow Margin: 8.5%, down from 17.9% in the same quarter last year
- Market Capitalization: $258.9 billion
"Our strong execution and operational focus in the third quarter enabled RTX to deliver double-digit organic sales growth* across commercial aerospace and defense. Demand for our products remains robust with over $81 billion of new commercial and defense awards, resulting in a record backlog of $340 billion," said RTX Chairman and CEO Chris Calio.
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
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, RTX’s sales grew at a decent 8.5% 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 10.3% 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 11.1%, and its $24.97 billion of revenue exceeded Wall Street’s estimates by 3.3%.
Looking ahead, sell-side analysts expect revenue to grow 5.9% over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and suggests its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.
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Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.
RTX has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.7%, higher than the broader industrials sector.
Looking at the trend in its profitability, RTX’s operating margin rose by 3.7 percentage points over the last five years, as its sales growth gave it operating leverage.
In Q3, RTX generated an operating margin profit margin of 13.4%, up 2.1 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
RTX’s EPS grew at 13.7% compounded annual growth rate over the last five years, higher than its 8.5% 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 3.7 percentage points over the last five years. On top of that, its share count shrank by 4.9%. 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 more recent period because it can provide insight into an emerging theme or development for the business.
For RTX, its two-year annual EPS growth of 16.7% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.
In Q3, RTX reported adjusted EPS of $2.26, up from $1.70 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 2.2% from $7.48 to $7.64.
Key Takeaways from RTX’s Q3 Results
It was good to see RTX beat analysts’ EPS expectations this quarter. We were also glad its full-year EPS guidance trumped Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 2.1% to $196.26 immediately after reporting.
Indeed, RTX had a rock-solid quarterly earnings result, but is this stock a good investment here? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
