RTX’s Q3 2025 Earnings Soar on Commercial Aviation Resurgence and Strategic Pricing

Robust Demand Drives Double-Digit Growth

RTX Corporation has reported impressive financial results for the third quarter of 2025, with sales climbing 12% year-over-year to $22.5 billion and earnings per share surging 17% to $1.70. The aerospace and defense giant exceeded Wall Street expectations on both revenue and net income, signaling a strong recovery in the commercial aviation sector. This performance underscores how strategic positioning across both original equipment manufacturing and aftermarket services is paying dividends for the company.

Robust Demand Drives Double-Digit Growth
Production Ramp-Up and Aftermarket Strength
Strategic Partnerships and Production Alignment
Navigating Tariff Impacts and Pricing Strategy
Market Response and Future Outlook

Production Ramp-Up and Aftermarket Strength

CEO Chris Calio highlighted “positive OE production trends“ during the October 21 earnings call, noting significant increases across RTX’s key business units. Collins Aerospace demonstrated robust production growth, while Pratt & Whitney recorded a 6% increase in large commercial engine deliveries. The commercial aftermarket business remained particularly strong, supported by what Calio described as RTX’s “large and growing installed base.” This includes over $100 billion of out-of-warranty content at Collins Aerospace and increased maintenance, repair, and overhaul (MRO) activities.

The company‘s aftermarket momentum is further evidenced by Pratt & Whitney Canada’s performance, which posted more than 15% growth year-to-date in commercial aftermarket services. With nearly 70,000 engines in service, this segment represents a significant recurring revenue stream. Low aircraft retirement rates have also contributed to this strength, with only 1.5% of the V2500 fleet retired so far in 2025.

Strategic Partnerships and Production Alignment

RTX’s collaboration with major aircraft manufacturers appears well-synchronized despite earlier challenges. Calio expressed confidence in commercial aircraft delivery trends, emphasizing close cooperation with Airbus to ensure supply chain alignment. Regarding Boeing, he noted satisfaction with the company‘s plans to increase 737 MAX production rates.

CFO Neil Mitchill acknowledged that inventory issues present at the beginning of 2025 have largely been resolved. “A lot of that is behind us,” he stated, adding that RTX is now “pretty synchronized with Boeing and delivery schedule.” This improved coordination suggests smoother operations heading into 2026, though Mitchill noted that higher 787 widebody production presents some margin challenges for Collins Aerospace., according to recent studies

Navigating Tariff Impacts and Pricing Strategy

The company isn’t without its headwinds, however. Mitchill revealed that tariffs impacted Collins Aerospace by approximately $90 million during the quarter, representing what he called the “key driver” behind margin pressure. Despite identifying mitigation strategies, the tariff effects continue to challenge profitability in certain segments.

In response to both strong market demand and tariff pressures, RTX is adopting an aggressive pricing strategy. Calio explained that both Pratt & Whitney and Collins Aerospace are pricing aggressively in 2025 and plan to continue this approach into 2026. “Because of the value that we bring and because of the demand that’s out there,” he stated, the company sees opportunity to leverage its market position through strategic catalog pricing.

Market Response and Future Outlook

Investors have responded enthusiastically to RTX’s strong quarterly performance, driving the company’s share price up more than 8% following the earnings announcement. Analyst sentiment appears equally positive, with Vertical Research Partners’ Robert Stallard noting that backlog growth matching sales growth in the third quarter positions RTX well to maintain momentum through 2026., as our earlier report

The combination of production increases, aftermarket strength, and strategic pricing suggests RTX has successfully navigated post-pandemic recovery challenges while positioning itself for sustained growth. As commercial aviation continues its upward trajectory, RTX’s diversified approach across both OEM and aftermarket segments provides multiple avenues for continued financial success.