RTX (RTX -1.24%) is one of the world's largest defense companies by revenue, and it's posting strong sales and earnings growth amid a tense geopolitical backdrop and rising military spending. The company's revenue rose 14% year over year to $24.7 billion in the second quarter, and non-GAAP (generally accepted accounting principles) adjusted earnings per share increased 21% to $1.89.
Strikingly, the company's backlog -- deals that have been signed but not yet delivered or recorded as revenue -- increased by 22% compared to the prior-year period, reaching $289 billion. But while RTX's massive backlog is undeniably impressive, its composition might not be what you would expect.
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RTX isn't just a defense leader. The company also operates a commercial aerospace division, which accounted for 48% of overall revenue in its last fiscal year.
As of the company's second-quarter report, roughly 60% of its $289 billion backlog was orders for its commercial aerospace business -- with the remaining 40% coming from defense orders. The key takeaway here is that RTX's order book is actually meaningfully diversified, and the backlog suggests a strong sales outlook in the coming years.
NYSE: RTX
Key Data Points
Its backlog is likely even stronger than reported for Q2, with the company recently announcing it had secured a seven-year contract to provide Tomahawk cruise missiles to the U.S. military. The contract is worth $22.9 billion over the stretch.
RTX's latest guidance update calls for sales to come in between $95 billion and $96 billion this year. With the company's backlog showing a robust order pipeline and catalysts that could continue to push defense orders higher, the business has solid foundations and an encouraging growth outlook.
