Northrop, RTX lift 2026 profit forecasts as defence orders grow

Northrop Grumman and RTX raised their full-year 2026 profit forecasts on October 20 as strong military demand pushed their order backlogs to records of $109.6 billion and $340 billion, respectively. Economic Times Markets reported that commercial aircraft maintenance and engine demand also supported growth at RTX and GE Aerospace.

GE Aerospace increased its annual earnings forecast for the second time this year, but its shares fell 4.9% in early trading as its implied fourth-quarter earnings fell short of expectations. Northrop gained 7.2%, while RTX rose 2.4%.

Military programmes expand order books

Sales at RTX’s Raytheon business rose 14%, supported by naval programmes and land and air defence systems, including Patriot, Standard Missile and Tomahawk. RTX finance chief Neil Mitchill told Reuters that demand remained strong across the company’s products and services.

RTX secured $81 billion in new commercial and defence awards. Its total backlog reached $340 billion, an increase of 36% from a year earlier.

Northrop’s Aeronautics Systems division also recorded a 14% sales increase, helped by higher B-21 Raider bomber sales and increased F-35 production. The company makes the B-21 and supplies parts for the F-35.

Northrop won $16.4 billion in new contracts during the quarter, with orders running at 1.5 times billings. Demand included the Sentinel programme, F-35, Virginia-class submarines and certain classified programmes. Its backlog stood at $109.6 billion on September 30.

Higher earnings guidance across all three companies

Northrop now projects 2026 adjusted earnings of $29.35–$29.75 per share, compared with its earlier range of $28.60–$29.10.

RTX raised its adjusted earnings forecast to $7.65–$7.75 per share from $7.10–$7.25. It also lifted its annual sales outlook to $97 billion–$97.5 billion, up from $95 billion–$96 billion.

GE Aerospace forecasts adjusted earnings of $8.00–$8.10 per share, against its previous projection of $7.65–$7.85. The new range exceeds the $7.92 analyst expectation cited from LSEG data. These figures are company forecasts, not final full-year results.

Aircraft servicing remains strong, but fuel costs pose a risk

Airline maintenance spending and demand for Pratt & Whitney engines and parts supported RTX’s commercial aerospace business, even as higher fuel costs put pressure on airline profitability.

GE Aerospace’s commercial engines and services revenue rose by more than a fifth to $10.34 billion. The company cautioned, however, that persistently expensive fuel could prompt airlines to cut flying, reducing their need for engine repairs, spare parts and spare engines.