RTX Corporation (RTX +3.34%) stock reported final 2025 earnings results this morning, sending shares of the defense stock up 2.1% through 9:45 a.m. ET.
Heading into the report, analysts forecast RTX to earn $1.47 per share on sales of $22.7 billion. Sales for the quarter actually came in at $24.2 billion, and earnings were $1.55, adjusted for one-time items (i.e., non-GAAP).
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RTX Q4 earnings
Sales climbed 12% year over year in Q4. Although non-GAAP earnings grew only 1%, actual earnings as calculated according to generally accepted accounting principles (GAAP) increased 8%.
Compared to full-year results, these numbers were both better... and worse. 2025 sales grew only 10% (so sales accelerated in Q4) to $88.6 billion. GAAP earnings for the year increased 40% to $4.96 per share.
Free cash flow showed more clearly defined improvement, and may be the reason why RTX stock is moving higher today. The defense company generated $3.2 billion in cash profit in Q4 (up 549% year over year), and $7.9 billion for the full year (up 75% versus 2024).
NYSE: RTX
Key Data Points
Is RTX stock a buy?
CEO Chris Calio says his company is starting 2026 "with great momentum and [is] well positioned to deliver our 2026 financial outlook." The company anticipates adjusted sales between $92 billion and $93 billion (so 4.4% sales growth at the midpoint). Adjusted earnings should range from $6.60 to $6.80 (about 6.5% growth). Free cash flow will be between $8.25 billion and $8.75 billion (or 7.6% growth).
All the above implies modestly growing sales amplified by improved profit margin on those sales. That's good news. I'm just not sure it's good enough to justify the stock's 31 times free cash flow valuation.
RTX is still a sell for me.
