RTX (NYSE:RTX) Surpasses Forecasts with Robust Q4 Performance in CY2025

Raytheon (RTX) Surpasses Q4 2025 Expectations

Raytheon (NYSE:RTX), a major player in the aerospace and defense sector, posted fourth-quarter 2025 results that exceeded analysts’ revenue forecasts. The company reported sales of $24.24 billion, marking a 12.1% increase compared to the same period last year. For the full year, Raytheon projects revenue to reach approximately $92.5 billion, closely aligning with market predictions. Adjusted earnings per share (EPS) came in at $1.55, which is 5.3% higher than consensus estimates.

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Highlights from RTX’s Q4 2025 Report

• Revenue: $24.24 billion, surpassing analyst expectations of $22.65 billion (12.1% year-over-year growth, 7% above forecast)
• Adjusted EPS: $1.55, beating the $1.47 estimate (5.3% above forecast)
• Adjusted EBITDA: $3.94 billion, outpacing the $3.59 billion estimate (16.2% margin, 9.6% above forecast)
• 2026 Adjusted EPS Guidance: Midpoint set at $6.70, matching analyst projections
• Operating Margin: 10.7%, consistent with the previous year’s quarter
• Free Cash Flow Margin: 13.2%, a notable increase from 2.3% a year ago
• Organic Revenue Growth: 14% year-over-year
• Market Cap: $260.3 billion

“RTX achieved robust sales, adjusted EPS, and free cash flow in 2025, thanks to our ongoing commitment to operational excellence,” commented Chris Calio, RTX’s Chairman and CEO.

About Raytheon (RTX)

Raytheon, originally established as a refrigeration technology company, now delivers a broad array of products and services to the aerospace and defense markets.

Revenue Performance

Evaluating a company’s long-term sales trajectory helps gauge its overall strength. While short-term gains are possible for any business, sustained growth is a hallmark of industry leaders. Over the past five years, Raytheon’s annualized revenue growth was 6.5%, which is considered modest for the industrial sector and falls short of our benchmark for excellence.

Although long-term trends are important, focusing solely on the past five years can overlook recent shifts in demand or industry cycles. In the last two years, Raytheon’s annualized revenue growth accelerated to 9.2%, indicating a recent uptick in demand.

To gain a clearer picture of Raytheon’s sales momentum, it’s helpful to examine organic revenue, which excludes the effects of acquisitions and currency changes. Over the past two years, organic revenue grew at an average annual rate of 12.5%. This outpaces the company’s overall revenue growth, suggesting that factors like divestitures and foreign exchange rates have tempered headline results.

This quarter, Raytheon reported a 12.1% increase in revenue compared to the previous year, with its $24.24 billion in sales coming in 7% above Wall Street’s expectations.

Future Outlook

Looking forward, analysts anticipate Raytheon’s revenue will grow by 4.6% over the next year, representing a slowdown from the recent pace. This suggests the company may encounter some headwinds in maintaining demand for its offerings.

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Profitability: Operating Margin

Operating margin reveals how much profit a company retains from its revenue after covering core expenses. It’s a useful metric for comparing profitability across companies, as it excludes interest and taxes.

Raytheon has remained profitable over the past five years, but its average operating margin of 8% is considered low for an industrial company. On a positive note, the company’s operating margin has improved by 2.8 percentage points during this period, benefiting from increased sales and operational leverage.

In the fourth quarter, Raytheon’s operating margin stood at 10.7%, matching the result from the same quarter last year. This reflects a stable cost structure.

Earnings Per Share (EPS) Trends

Tracking long-term EPS growth helps assess whether a company’s expansion is translating into greater profitability for shareholders. Over the past five years, Raytheon’s EPS has grown at a compound annual rate of 14.2%, outpacing its revenue growth and signaling improved profitability per share.

Diving deeper, Raytheon’s operating margin has expanded by 2.8 percentage points over five years, and its share count has decreased by 10.1%. These factors have contributed to EPS growth that exceeds revenue gains, benefiting shareholders through both improved margins and share buybacks.

Examining more recent performance, Raytheon’s two-year annual EPS growth rate was 11.6%, slightly below its five-year average but still strong. In the latest quarter, adjusted EPS reached $1.55, up from $1.54 a year earlier and 5.3% above analyst expectations. Wall Street projects full-year EPS of $6.28 for the next 12 months, representing 7.2% growth.

Summary of Q4 Results

Raytheon’s fourth-quarter results were notably strong, with organic revenue and EBITDA both surpassing analyst forecasts by a wide margin. The company’s stock price rose 3.3% to $200.47 following the announcement.

While the recent quarter was impressive, investors should weigh longer-term fundamentals and valuation before making decisions.