RTX Corporation (NYSE: RTX)

RTX delivered strong financial performance in Q1 2025, with sales growth of 5% year-over-year to $20.3 billion, or 8% organic growth when excluding divestitures. While GAAP net income decreased by 10% to $1.5 billion due to acquisition accounting adjustments and restructuring costs, adjusted net income increased by 11% to $2.0 billion. Adjusted EPS grew 10% to $1.47, reflecting the company's operational strength and margin expansion. Operating cash flow saw substantial improvement, increasing 282% to $1.3 billion, resulting in free cash flow of $0.8 billion compared to negative $125 million in the prior year period. The company returned $0.9 billion to shareholders during the quarter.

RTX's segment performance in Q1 2025 demonstrated strong operational execution across the business. Collins Aerospace and Pratt & Whitney both delivered double-digit growth in adjusted operating profit, with margin expansion of 130 basis points each. The robust 28% increase in Pratt & Whitney's commercial aftermarket sales and the 13% growth in Collins Aerospace's commercial aftermarket highlight the continued recovery and strength in the commercial aviation market. While Raytheon's reported sales decreased by 5% due to the divestiture of the Cybersecurity, Intelligence and Services business in Q1 2024, organic sales growth was 2%, and adjusted operating profit increased 8%, with 120 basis points of margin expansion. Overall, RTX's adjusted segment margin expanded 120 basis points to 11.9%, demonstrating the company's focus on operational efficiency and profitability.

RTX demonstrated significant improvement in cash generation during Q1 2025, with operating cash flow increasing 282% year-over-year to $1.3 billion. After capital expenditures of $0.5 billion, free cash flow was $0.8 billion, compared to negative $125 million in Q1 2024. This substantial improvement reflects stronger operational performance and more efficient working capital management. The company returned $0.9 billion to shareholders during the quarter, including $840 million in dividends and $50 million in share repurchases. Total assets increased to $164.9 billion as of March 31, 2025, up from $162.9 billion at the end of 2024, while total equity grew 2.2% to $63.3 billion. RTX maintains a solid balance sheet with $5.2 billion in cash and cash equivalents to support its operations and strategic initiatives.

RTX has maintained its full-year 2025 guidance, projecting adjusted sales of $83.0-$84.0 billion, including organic growth of 4-6%. The company expects adjusted EPS of $6.00-$6.15 and free cash flow of $7.0-$7.5 billion. It's important to note that this outlook does not incorporate the impact of recently enacted incremental U.S. and non-U.S. tariffs. Management has indicated they will provide additional details on potential tariff impacts during the Q1 2025 earnings call.