Comments about tariff impacts helped send the stock of aerospace and defense company RTX (RTX -0.31%) down today. It was down 10.5% at 1:30 p.m. ET as broader markets rallied. 

RTX's first-quarter earnings and guidance

There was nothing wrong with RTX's first-quarter earnings report released today, and the full-year sales and earnings guidance remained the same, with management continuing to expect organic sales growth of 4%-6%, adjusted EPS of $6.00-$6.15, and free cash flow (FCF) of $7 billion to $7.5 billion.

However, the market was shocked by management's estimates for the potential impact of tariff actions. For context, RTX's adjusted operating profit was about $10.2 billion in 2024.

Tariff

Negative Impact on Operating Profit

Canada and Mexico tariffs

~$250 million

China/Tariffs from China

~$250 million

Global reciprocal

~$300 million

Steel and aluminum

~$50 million

Total

~$850 million

Data source: RTX presentations.

It gets worse. These estimates include mitigating actions management can take to alleviate the impact. Also, CFO Neil Mitchill told investors on the earnings call that "the cash flow impact would be a bit larger" due to delays in getting refunds on duties.

Where next for RTX

The news is obviously disappointing, but it's in the stock's price now and that $850 million arguably represents upside potential if there's a resolution to the trade conflict -- something all parties say they want -- an interesting situation that investors will need to continue to watch.