RTX Corporation (RTX)

“We've always talked about our ability to get back to, call it, 19%, 20% type margins... all of those things we see growing over the next few years, and that additional volume is going to help with absorption and you couple that with this cost reduction, what you called self-help, and we agree, all of that puts us in a good position to continue to drive these margins higher over the next several years.”

“And so all of those things go into what we consider to be Raytheon being on track to continuing to drive margin expansion in its business and getting to that, we'll call it, full potential area that we talked about previously.”

“Now I will say we're also going to continue to drive deliveries to Airbus. We'll be up in the second half of the year there, and we'll deliver a record number of GTF engines this year.”

“For the full year, our organic sales are going to be up 8% to 9%.”

“Finally, we now expect free cash flow to be between $8.5 billion and $8.75 billion for the full year, up from our prior range of $8.25 billion to $8.75 billion, primarily driven by higher segment operating profit.”

“We now see adjusted EPS of between $7.10 and $7.25 for the full year, up from our prior range of $6.70 to $6.90.”

“This translates to full year RTX organic sales growth of between 8% and 9%, up from our prior range of between 5% and 6%.”

“On the top line, we're raising our full year adjusted sales outlook by $2.5 billion to a new range of $95 billion to $96 billion, up from our prior range of $92.5 billion to $93.5 billion.”

“So based on our first half execution and the demand strength we're seeing across our commercial and defense markets, we're raising our full year outlook for adjusted sales, EPS and free cash flow.”

“Those are going to -- you're going to start to see those flow through next year and beyond.”

“There's a big step-up in the second half... about 60% of that step-up is going to come from drop-through on the higher volume that we're going to see across all the channels at Collins in the second -- in the third and fourth quarter rather. And the rest, 40% of that is going to come from cost reduction actions.”

“I would put about $525 million at the midpoint of our increase at Collins to the commercial OE side, and it's really across both narrow-body and wide-body.”

“As it relates to our plans with Airbus, no change to our installs in terms of the full year... That will grow in the second half, the installs.”

“We continue to have low double-digit margins in the GTF aftermarket. I think that there continues to be opportunity there that we've talked about... We expect that to further benefit the GTF aftermarket margins as well.”

“Having achieved the 12-plus percent margin here and then as you look at the outlook for the rest of the year, seeing it still in the mid-12% range, we feel really good about the trajectory that we're on.”

“So I think what's important here, even as we see OE sales down a little bit is that it's really about the material allocation, and we're taking up the profit for Pratt. So we still see the margin expansion, not just this year, but we expect that to continue in years thereafter as this aftermarket continues to gain further traction and the profitability continues to accrue to those contracts.”

“So we're taking up the top line by about $900 million at the midpoint. The vast majority of that is aftermarket, and it's really on the back of that higher work scope.”

“Collins is a little bit more normalized. So 12% growth in the first half, seeing in that 8%, 9% range in the second half.”

“We had 9% growth in the second half of last year. So we're starting to see the material receipts normalize throughout this year. And so that's really good for getting product out the door, but it does put a little bit of pressure on the growth rate, which is still fairly robust in the mid-single-digit range in the second half.”

“And in fact, we now think our OE sales for Pratt will be down in the low single-digit range as we continue to support that really strong material growth on the MRO side, and you saw that in the second quarter numbers.”

“In the second half, you'll see in our outlook, it implies somewhere in the 5% range at the midpoint of our outlook.”

“As far as the outlook, we took the bottom end of the range up $250 million to reflect the higher segment operating profit that we're putting through in our guidance updates today.”

“And we now expect operating profit to grow between $575 million and $650 million versus 2025, up from our prior expectation of between $275 million and $375 million, driven by the drop-through on increased sales volume, favorable program mix and improved productivity.”

“We now expect sales to grow high single digits to low double digits on an adjusted and organic basis. This is up from our prior range of high single digit due to the strength Neil mentioned.”

“With respect to operating profit, we now expect growth between $275 million and $350 million versus 2025, up from our prior expectation of between $225 million and $325 million, primarily driven by drop-through on increased sales volume.”

“We now expect sales to grow high single digit on both an adjusted and organic basis, up from our prior range of mid-single digit due to the strength in commercial aftermarket, partially offset by commercial OE mix.”

“With respect to operating profit, we now expect growth between $550 million and $625 million versus 2025, up from our prior expectation of between $425 million and $525 million, driven by drop-through on increased sales volume and ongoing cost reduction initiatives.”

“And organically, we now expect high single-digit to low double digits growth, up from our prior range of high single digit.”

“We now expect sales to grow mid- to high single digits on an adjusted basis, up from our prior range of mid-single digit.”

“And with respect to defense sales, we now see growth of high single digits, which is at the higher end of our prior range of mid- to high single digits.”

“Within commercial aftermarket, we now expect sales to grow low double digits across the company this year, up from our prior expectation of high single digits, driven by the strength at Pratt that I mentioned earlier.”

“Breaking this down further, we now expect commercial OE sales to grow mid- to high single digits, up from the prior expectation of mid-single digits, primarily attributable to the production ramp at Collins.”

“We expect entry into service later this year and full production cutover in 2028.”

“PW1100 AOGs are down again sequentially and down 25% year-to-date, and we expect AOGs to keep trending lower throughout the second half of the year.”

“Business has a good trajectory. We're expecting solid growth for the full year, and pretty good line of sight to mods and upgrades for the remainder of the year.”

“On your first question, as Neil said, we're going to continue to see OE deliveries step up throughout the year. And when we get to the end and execute on that plan, it's going to be a record number of GTF engines that we've delivered and that delivery share is going to remain above the program share.”

“Given all the elements that I just talked about within MRO and those indicators, we continue to believe that that downward trajectory is going to continue.”

“On free cash flow, we remain on track to our outlook of between $8.25 billion and $8.75 billion for the full year.”

“We now see adjusted EPS of between $6.70 and $6.90 for the full year, up from our prior range of $6.60 to $6.80.”

“We're raising our full year adjusted sales outlook by $500 million to a new range of $92.5 billion to $93.5 billion, up from our prior range of $92 billion to $93 billion, driven by the performance we saw at Raytheon in the first quarter as well as slightly lower sales eliminations for the year.”

“So given our first quarter results and the strength we're seeing in our defense business, we're raising our full year outlook for adjusted sales and EPS and maintaining our free cash flow outlook.”

“But as we think about it, the negative engine margin will ramp up over the next several quarters as we kind of balance the mix of material between MRO and OE and drive the OE -- the AOG is down, and then continue to deliver to our end customer, Airbus.”

“And as you said, up mid- to high single-digit unit delivery. So we'll continue to grow the number of new engines we delivered this year, and that will kind of happen pretty ratably as we think about the rest of the year.”

“As you look at the implied performance for Pratt through the rest of the year, we still expect OE to be low single-digit sales.”

“So as we look out, we're planning, call it, 1% to 2% kind of retirements for [ the V ].”

“As you look at the rest of the year, the margins remain relatively steady.”

“So as we sit here and look at '26, there's no changes to our by-channel outlooks at this point for commercial OE or aftermarket.”

“We're going to continue to see negative margins on deliveries of new engines, but obviously, the aftermarket is continuing to ramp there.”

“So as we talked about for this year, we do think there's going to be a couple of hundred million dollars of headwind on OE margins throughout the course of the year.”

“Really no change today to our outlook for tariffs for the P&L for the full year.”

“And we're seeing double-digit growth rates on those businesses in the quarter, and I expect that to continue as we go forward.”

“We will continue to make significant additional investments going forward to advance production capabilities and add new manufacturing lines to support these agreements.”

“Now the continued ramp of production is going to require growth in supply chain output and performance, as you've noted here.”

“We now expect operating profit growth between $275 million and $375 million versus 2025, up from our prior expectation of between $200 million and $300 million, driven by the drop-through on higher sales and favorable program mix.”

“We expect sales to grow high single digits on an adjusted and organic basis, up from our prior range of mid to high single digits due to the strength Neil mentioned earlier.”

“We continue to expect sales to grow mid-single digits on an adjusted and organic basis, with operating profit growth between $225 million and $325 million versus 2025.”

“As Chris said, we continue to expect mid to high single-digit large commercial engine delivery growth for the full year.”

“We continue to expect sales to grow mid-single digits on an adjusted basis and high single digits organically, with operating profit growth between $425 million and $525 million versus 2025.”

“And given the increase at Raytheon, we now expect defense sales to grow mid to high single digits for the full year, up from our prior expectation of mid-single digits.”

“We continue to expect commercial OE sales to grow mid-single digits and commercial aftermarket sales to grow high single digits for the full year.”

“We continue to expect this to translate to between 5% and 6% organic sales growth for the full year at the RTX level.”

“We also remain on track to connect 60% of our annual manufacturing hours to our proprietary data and analytics platform by the end of this year.”

“and we recently received aircraft certification of the GTF Advantage, keeping us on track for entry into service later this year.”

“On the OE front, GTF shipments were in line with our expectations for Q1, and we continue to expect mid to high single-digit delivery growth for the year.”

“PW1100 AOGs were down around 15% compared to the end of last year. We expect this downward trend to continue.”

“We expect continued production ramps across multiple platforms throughout the remainder of the year.”

“So again, it's 1 quarter. We think that the business is performing quite well. We're seeing really good mix in the business. And as we continue to see that supply chain keep pace with our delivery plans, then we'll revisit that again here in July.”

“There's no reason to believe that the Raytheon margins can't be north of 12%, and we're certainly well on our way in this outlook that we put out today.”

“I think, importantly, for Raytheon, about 85% of our 2026 sales are sitting in our backlog today. So I'm feeling very confident in in the outlook that we put out today for them.”

“We remain committed to the dividend.”

“Increased volume, along with pricing and our continued focus on productivity and our cost structure, will support another year of consolidated segment margin expansion.”

“We've got about $3.4 billion of payments that are coming due this year that we anticipate to make and bring that debt down further.”

“In our outlook for 2026, we have $700 million place held as the cash outflow.”

“As you as you go to 2026, inclusive of tariffs, we're gonna see another 80 basis points of margin expansion at the midpoint.”

“We do expect to see a bit of a tailwind as we move from 2025 to 2026 on tariffs, probably $75 million lower.”

“We've seen 11 consecutive quarters of growth. We're expecting mid- to high single digit growth in mid material again here in '26.”

“There's a little bit of offset on the PW4000s and 2000s as those older engines start to retire. Those are expensive overhauls, and know, we're seeing a little bit of headwind there, probably about $100 million for 2026.”

“Think for 2026, we're expecting it to be more or less the same, probably within 20 shop visits of, 2025.”

“We'll see growth in their aftermarket that's in the high single digit range.”

“About 70% of Pratt's growth in '26 is going to come from commercial aftermarket.”

“As we think about 2026, I think the large commercial engine output in terms of deliveries is likely to be up call it, mid to high single digits.”

“We're also gonna increase our CapEx to enable that ramp.”

“We expect to significantly increase output again this year.”

“So all in, this positions us pretty well to grow MRO output at a similar level in 2026.”

“Within the military business of Pratt, sales are expected to be up mid single digits driven by higher F135 production and sustainment volume.”

“Commercial aftermarket is expected to be up high single digits driven by higher volume across large commercial engines primarily GTF and Pratt Canada.”

“Defense sales are expected to be up mid single digits driven by multiple programs including the F-35, other mission systems platforms.”

“Commercial aftermarket is expected to be up high single digits, driven primarily by further growth in out of warranty flight hours and global RPKs.”

“Adjusting for the divestitures we completed in 2025, we expect commercial OE to be up approximately 10% driven by double digit growth across narrow body and wide body production, along with single digit growth across business jet and civil rotorcraft platforms.”

“Lastly, we expect a headwind of approximately $300 million for all other items including the net impact of pension, interest, taxes, and other investments.”

“For the full year, we expect to invest approximately $3.1 billion in CapEx.”

“Partially offsetting these items will be the impact of higher CapEx of approximately $500 million as we invest to support the growing customer demand that Chris discussed.”

“Specific to powder metal compensation, we expect around $700 million for the year, which results in a tailwind of about $300 million year over year.”

“Operational performance, primarily segment operating profit growth, will drive an improvement of approximately $1.1 billion.”

“Finally, we expect a $0.05 headwind from a higher share count and anticipate a $0.06 headwind from all other items largely related to higher minority interest associated with our joint ventures.”

“Partially offsetting these items is approximately $0.13 from lower pension income driven primarily by the actions we've taken to derisk our pension plans including the transaction I just mentioned.”

“With lower average debt, we expect a tailwind from lower interest of about $0.06.”

“For the year, the most significant driver will be segment operating profit, which will drive approximately $0.59 of EPS growth at the midpoint of our outlook range.”

“We have begun production cut in of the advantage engine and expect entry into service later this year along with certification and first installations of the associated hot section plus upgrade package for MRO customers.”

“In 2026, we plan to invest another $10.5 billion in CapEx in company and customer funded research and development, including another $3.1 billion in CapEx on top of the $2.6 billion I just highlighted for last year.”

“We expect this momentum to continue in 2026 with year over year growth in PW1100 MRO output in line with what we saw in 2025.”

“As planned, PW1100 AOGs declined in the fourth quarter, and we expect this trend to continue as we move throughout the year.”

“In 2026, we expect to significantly increase output again on these programs as well as on other critical munitions, including SM-6, and Tomahawk.”

“In commercial aftermarket, our growing installed base, which now includes about $105 billion of out-of-warranty aircraft content at Collins, and expanding fleet of engines at Pratt, positions us well for sustained commercial aftermarket growth.”

“See one to two points maybe of expansion here in '26.”

“I think if we look inside of the install side, we still see growth on both the installs and probably flattish on the spare engine deliveries for 2026.”

“Today, we sit here and the financial outlook remains consistent with the outlook that we've had for now a couple of years.”

“And I think we're in a pretty good position to be able to hit that 30% for the full year.”

“On free cash flow, we are on track to achieve our outlook of between $7 billion and $7.5 billion for the year.”

“we now see adjusted EPS at a new range of between $6.10 and $6.20 for the full year, up from our prior range of $5.80 to $5.95.”

“we are increasing adjusted earnings per share $0.30 on the low end of our range and $0.25 on the high end.”

“This now translates to between 8% and 9% organic sales growth for the year, up from our prior range of 6% to 7%.”

“we are raising our full year adjusted sales outlook to a range of $86.5 billion to $87 billion, up from our prior range of $84.75 billion to $85.5 billion.”

“I think we'll see another few hundred million dollars of inventory reduction as we exit the year.”

“We've got a healthy level of CapEx invested -- expected this year, $2.5 billion to $2.7 billion, similar amounts of company-funded R&D throughout the business this year and I expect that to continue as we look forward.”

“As I sit here today, I think we're going to end up in the high double -- high single-digit rather, growth rate. So think about 8% to 10% kind of range.”

“As it relates to full year negative engine margin, no change to the outlook from the beginning of the year, still within that [ 150 to 200 ] year-over-year headwind. I expect it's going to land somewhere in the middle of that at the end of the year.”

“I think as we go forward, we continue to do a lot of work to continue to support our products and qualification for USMCA treatment or bonds as we reexport material outside of the United States. So -- and of course, pricing. So there's an opportunity there to continue to mitigate the headwinds”

“We said between $1.1 billion and $1.3 billion for the year. And so the residual falls into next year.”

“On a year-over-year basis, there will be a little bit more headwind from the higher negative engine margin in the fourth quarter.”

“as we look at the fourth quarter, we do expect continued OE step up there.”

“And we now expect operating profit growth between $400 million and $450 million versus 2024, up from our prior expectation of between $225 million and $300 million, driven by the favorable international program mix we saw during the third quarter.”

“We continue to expect sales to grow low single digits year-over-year on an adjusted basis and mid-single digits organically.”

“And we now expect operating profit growth between $350 million and $400 million versus 2024, up from our prior expectation of between $200 million and $275 million, driven by drop-through on higher commercial aftermarket volume and favorable commercial OE mix.”

“We now expect sales to grow low to mid-teens on an adjusted and organic basis, an increase from our prior range of up low double digits, driven by strength in commercial aftermarket and favorable commercial OE mix.”

“we now expect operating profit growth between $325 million and $375 million versus 2024, up from our prior expectation of between $275 million and $350 million, driven by drop-through on higher commercial aftermarket volume.”

“We continue to expect sales to grow mid-single digits year-over-year on an adjusted basis and high single digits organically.”

“we expect a higher effective tax rate in the fourth quarter.”

“Specific to Q4, we expect another quarter of strong operational performance at the segment level, with segment profit up around 10% year-over-year, excluding the impact of tariffs and recent divestitures at Collins.”

“And on defense, we continue to expect sales to grow mid-single digits.”

“On the commercial OE side, we expect sales to grow around 10% for the year, up from our prior outlook of high single digits year-over-year.”

“we now expect commercial aftermarket sales to grow mid-teens year-over-year, up from our prior outlook of low teens, primarily driven by heavier shop visit content that we saw in Q3 at Pratt.”

“Raytheon is on track to invest $300 million in capacity expansion to deliver the growing backlog.”

“putting Pratt in a position to deliver about 30% MRO output growth for the year.”

“Yes. Maybe just to add to it, Gavin. I think long term, we think the 90% to 100% of free cash flow is where this business is positioned to sit.”

“next year, as we look forward, obviously, we expect powder metal payments to come down.”

“I think as we step back, we're prioritizing the dividend as we always have and we expect that to continue to grow with earnings over the next couple of years.”

“Continue to do that as we move into next year and get back to the levels that we enjoyed of debt before executing that transaction.”

“we see growth ahead on the Collins front.”

“these rates are increasing back to levels that we've capacitized for. We'll get better absorption and that will contribute to the continuation of margin expansion in the Collins business as it relates to the OE business.”

“long term, as Chris said, the mix of the backlog supports an expanding margin and we're happy to see the productivity continuing to develop in the business.”

“There's some international advances, those can be lumpy, but certainly feel confident those are within the year.”

“First of all, I want to emphasize the fact that we're confident in our $7 billion to $7.5 billion for this year.”

“I think that program is going to continue to have strength, frankly, beyond where we thought it would 3, 4 years ago. That platform continues to perform exceptionally well.”

“And so when we talk about ramping, it's about capacity, it's about the supply chain. We're investing about $250 million this year in capacity, Tucson, McKinney, Camden, and we're injecting people into the supply chain, which is, again, why you're seeing material growth for the ninth straight quarter at Raytheon.”

“We're going to see significant increases this year on a number of key programs, Gem-T and Coyote going to double in particular, AMRAAM.”

“All in, we now see adjusted EPS at a new range of $5.80 to $5.95 for the full year versus our prior range of $6 to $6.15.”

“This translates to between 6% and 7% organic sales growth for the year, up from our prior range of 4% to 6%.”

“Given our strong first half performance, we are increasing our full year adjusted sales outlook to a range of $84.75 billion to $85.5 billion up from our prior range of $83 billion to $84 billion.”

“With this dividend increase, we now expect to deliver $37 billion of capital to shareowners from the date of the merger through the end of this year and we remain committed to a long-term capital return policy that includes growing our dividend and returning excess capital to shareowners.”

“And we remain on track for over 30% MRO output improvement for the full year, which is a key enabler to reducing AOGs in the second half.”

“On the GTF fleet management plan, our financial and technical outlook remains consistent with our prior comments.”

“And for free cash flow, we are maintaining our full year outlook.”

“We're also revising our adjusted EPS outlook to incorporate drop-through on the higher sales, continued cost discipline across the business, and our current assessment of tariff impacts.”

“As a result of these developments and our strong first half performance, we're increasing our adjusted sales outlook for the full year.”

“But again, we need to continue to see that ramp happen in that 30% increase range as we move through the year.”

“On the AOGs, David, I'll just say they stabilized, and we're expecting them to come down meaningfully here in the second half.”

“We continue to have ramp up, as I said before, on GTF MRO in the back half of the year.”

“On the GTF advantage, production has already begun. We've got deliveries planned for the -- later in this year towards the end of this end of this year.”

“And on the A320 again, continue to ramp there as well, Ron. We had the work stoppage, of course, which impacted a little bit here in the quarter. But again, I think we're going to make that up in the balance of the year.”

“We now see the aftermarket up mid-teens.”

“We think that between the way we're looking at the year in terms of our risk and opportunities as well as the range we provided in the earnings per share, we'd be able to absorb that.”

“We continue to expect sales to grow low single digits on an adjusted basis and mid-single digits organically with operating profit growth between $225 million and $300 million versus 2024, up from our prior expectation of between $150 million and $225 million, driven by favorable international program mix.”

“With respect to operating profit, we now expect growth between $200 million and $275 million versus 2024 compared to our prior expectation of up between $325 million and $400 million, driven by the expected impact of tariffs partially offset by increased volume drop-through.”

“We now expect sales to grow low double digits on an adjusted and organic basis an increase from our prior range of up high single digit driven by strength in commercial aftermarket and commercial OE mix.”

“With respect to operating profit, we now expect growth between $275 million and $350 million versus 2024 compared to our prior expectation of up between $500 million and $600 million, driven by the expected impact of tariffs which was partially offset by increased volume drop-through.”

“We now expect sales to grow mid-single digits on an adjusted basis and high single digits organically, up from our prior range of up low single digits on an adjusted basis and up mid-single digits organically, driven by strength in commercial aftermarket and defense.”

“The primary drivers of our second half cash flow growth will come from segment profit and working capital improvements, including the recovery from the work stoppage at Pratt.”

“On free cash flow, we continue to expect between $7 billion and $7.5 billion for the full year as the headwind from tariffs will be offset by the benefit from improved cash taxes.”

“In addition, improved operating performance, including additional profit growth at Raytheon and volume drop-through at Pratt & Collins is providing $0.10 of EPS improvement, which partially offsets the $0.30 tariff headwind.”

“With respect to taxes, we are pleased with several elements of the recently enacted legislation that restores the full expensing of research and development costs and maintain stability in the corporate tax rate and we continue to expect an effective tax rate of 19.5% for the full year.”

“In addition, we see the associated cash impact to be around $600 million for the full year, again, a notable improvement.”

“As a result, our current assessment of 2025 tariff costs, net of mitigation is around $500 million, with approximately $125 million already incurred in the first half of the year.”

“And we continue to expect defense sales to grow mid-single digits across the company.”

“On the commercial OE side, sales are expected to grow high single digits year-over-year, up from our prior outlook of mid-single digits.”

“Looking at it by channel at the RTX level and adjusting for divestitures, we now expect commercial aftermarket sales to grow low teens, up from our prior outlook of around 10% growth.”

“On the trade front, it continues to be fluid, but our outlook on the impact of tariffs has improved for the year as there have been some positive announcements to date such as the U.K. agreement, which provides exemptions for aerospace components.”

“In commercial aerospace, OE production was strong and in line with our expectations for the first half of the year and we remain positive on the ramp continuing in the back half, supporting growing demand for our products.”

“And free cash flow for the quarter was approximately breakeven as we previously discussed, primarily related to the 4-week work stoppage at Pratt in May, which we expect to recover in the second half of this year.”

“However, the ingredients are there for growing aftermarket and don't forget about Pratt Canada and the military engine business, both very profitable, above, well above where the Pratt composite margin is today, and those will continue to grow in volume as well, contributing to improved margins in the Pratt business.”

“As we've talked about longer term, Pratt is a mid-teens, low to mid-teens business.”

“All of that, I think, puts us in a position where Pratt's margins continue to expand sequentially as we go through '25, '26, '27.”

“So I see sustained revenue and profit from those aftermarket visits over the next several years as well.”

“I expect tailwind to the overall Pratt margins over the next couple of years.”

“As we said, the advantage itself was going to be kind of a 2x time on wing improvement and the hot sections is going to get 90% to 95% of that time on wing benefit.”

“These comprise the majority -- overwhelming majority, almost 90% of the durability improvements from the GTF advantage, and those are going to start to enter into MRO next year.”

“So all of those create tailwind and will get us on that journey well on that journey to the 12-plus percent margins that we see Raytheon at.”

“Right now, I would say we've made good progress there. And I'm seeing good traction. Don't want to put a number on it today, but our intent here is to continue to aggressively mitigate these headwinds so that we don't see a larger year-over-year headwind coming into $26 million.”

“But we'll expect that to continue to be a benefit going forward in '26, '27 and '28 as we continue to work through the varying provisions of that bill, including the capitalization versus expensing of research and development and how we handle that and the interplay with some corporate alternative minimum taxes.”

“We think it can get back into the 12%-plus range and will.”

“We remain on track for initial deliveries to Airbus later this year.”

“we remain on track for over a 30% improvement for the full year.”

“So, again, assuming all that holds, we expect that margin to hold as we go through the rest of the year as well.”

“We saw about $15 million year-over-year productivity improvement. We had said we'd see about $100 million on a full-year basis and still hold that expectation.”

“we don't see any material changes there. And again, we see a ramp ahead and we want to stay out of their way, make sure they have what they need from us as they're moving up that ramp.”

“we still got a ramp ahead of us across a number of effectors because the demand is really strong.”

“we expect us to be on track to continue to deliver growth there throughout the rest of the year.”

“So, think about that as about 15% to 20% above the rough estimate that we provided today.”

“I think there are some timing issues that will recover in the year, which we expected, but the global demand remains strong.”

“We expect a book-to-bill of 1.0 or more.”

“Turning to Raytheon's full year outlook. Excluding the potential impact of tariffs, we continue to expect sales to grow low-single-digits on an adjusted basis and mid-single-digits organically, with operating profit growth between $150 million and $225 million versus 2024.”

“Turning to Pratt's full year outlook. Excluding the potential impact of tariffs, we continue to expect sales to grow high-single-digits on an adjusted and organic basis with operating profit growth between $325 million and $400 million versus 2024.”

“Turning to Collins' full year outlook. Excluding the potential impact of the tariffs that Neil discussed, we continue to expect sales to grow low-single-digits on an adjusted basis and mid-single-digits organically, with operating profit growth between $500 million and $600 million versus 2024.”

“For all of these scenarios, we would expect to see most of the impact in the back half of the year as inventory is liquidated.”

“And finally, on steel and aluminum, we estimate the cost will be around $50 million for the year.”

“As it relates to the rest of the world, we estimate there would be a cost impact of around $300 million at the 10% tariff rate currently in place.”

“With respect to China, at current US and China tariff rates, we estimate there would also be a cost impact of around $250 million.”

“Starting with Canada and Mexico, assuming the USMCA agreement continues, we estimate there would be a cost impact of around $250 million, assuming current tariff rates remain in place for the rest of the year.”

“And this year, we're planning another $2 billion of investment to further increase our US capacity.”

“We expect it to provide up to 2 times the time on wing compared to the current engine, and it will enter service with full life LLPs.”

“This output is a key enabler for reducing AOGs, which we continue to expect to trend down in the back half of the year.”

“LTAMDS will now transition into the production and deployment phase with continued deliveries to the US this year and next, followed by deliveries to European customers.”

“We're targeting next year to have this package available for customers.”

“I think at this juncture in the year given the uncertainty we're seeing around the customer base, we're going to sit here and hold that for the rest of the year.”

“we're feeling more optimistic in our ability to avoid any notable impacts given the fire.”

“I think for a short period of time, even in a lower demand environment, those shop visits would likely stay relatively consistent.”

“On the commercial side, we remain cautiously optimistic that aircraft utilization will remain strong, supporting continued aftermarket demand.”

“We're pleased with the results and are on track for engine certification in the first half of this year with deliveries to follow in the second half.”

“At Pratt, you saw good margins coming out of the fourth quarter. And again, we think Pratt has the potential to grow its margins to where we thought they'd be today.”

“if you look at the outlook we put out today, you're going to see about a 40% incremental margin.”

“What's going to be a bright spot for Collins this year is mods and upgrades. That will be over 10% coming off a year that was flat.”

“On the provisioning, probably a little bit more in line with the OE growth, mid-single-digits, which tends to track sort of the install -- or not the install, the delivery of new aircraft.”

“we still see parts and repair up in the high single-digits, maybe a little bit better.”

“we haven't really seen any significant destocking. Obviously, the aftermarket growth for the last several years has been tremendous. And I think we're expecting at the RTX level about 10% growth again here in 2025.”

“we continue to make progress on the production ramp and the recovery. Doubled production output last year and remain on track to recover to the needs of our customers here in 2025.”

“we had about 14% growth in the units delivered of Large Commercial Engines in '24. We expect about the same growth in '25.”

“There were about 800 V2500 shop visits in 2024. We see about the same exact number as we look at '25.”

“And offsetting that, of course, is going to be some negative engine margin headwind. I'd put that in the range of $150 million to $200 million kind of range as we see the volumes continue to tick up.”

“the majority of Pratt's profit growth will come from aftermarket. We're going to see really good drop-through on the aftermarket, probably to the tune of $500 million or so.”

“And we see that continuing as we get into '25.”

“And then as you look at Pratt Canada, they were relatively flat, up about 1% on their units, but we expect that to tick up as well in '25, probably similar to what we're seeing on the Large Commercial Engines side in terms of units.”

“Large Commercial Engines, we were up 14% in unit deliveries last year. I expect a similar level of unit growth as we look to 2025.”

“But as we look through the year, we expect the ramp to continue to go up, and as you can tell from the inventory levels that we have at Collins, feel well positioned to meet a rising rate ramp should we see a faster growth as the year unfolds.”

“Clearly, a tailwind here, Ron. I see this continuing to grow.”

“Well, I'd say between the engine core upgrade on the F135 program and this work that we're doing, we've got Pratt in at mid-single-digit growth for the military side of their business.”

“Again, international demand continues to be strong. We've seen that in our backlog, and that will be a tailwind for us.”

“as you can see from today's comments, we see between $1.1 billion and $1.3 billion for '25.”

“But we need to continue to ramp output to bend the curve here as we work our way through 2025. And we talked about a plan here of above 30% growth in 2025, and that's going to be critical.”

“Raytheon's adjusted operating profit is expected to be up between $150 million and $225 million versus the prior year, driven by drop-through on higher volume, favorable contract mix and improved net productivity.”

“And at Raytheon, we expect sales to grow mid-single-digits organically as double-digit growth in land and air defense systems is partially offset by lower development volume.”

“For Pratt's adjusted operating profit, we expect growth of between $325 million and $400 million versus the prior year, driven primarily by drop-through on commercial aftermarket and military growth.”

“And military sales are expected to be up mid-single-digits, driven by sustainment activity across the F135 and F-100 platforms and the F135 Engine Core Upgrade program.”

“Commercial OE is expected to be up mid-single-digits with another year similar large commercial engine unit delivery growth, partially offset by mixed headwinds.”

“By channel, we expect commercial aftermarket to be up low double-digits due to higher volume across Large Commercial Engines and Pratt Canada.”

“Shifting to Pratt & Whitney. We expect full year sales to be up high single-digits on both an adjusted and organic basis.”

“Finally, this includes an approximately $80 million headwind associated with the actuation divestiture.”

“With respect to Collins' adjusted operating profit, we expect it to grow between $500 million and $600 million versus the prior year, driven by drop-through on higher volume across all three channels as well as higher pricing and continued progress on cost reduction efforts across the business.”

“And defense is expected to be up low single-digits on top of the 9% growth we saw in 2024.”

“Commercial OE sales are expected to be up mid-single-digits as increased volume on multiple platforms is partially offset by impacts from the expected timing of our customers' production ramps.”

“we anticipate commercial aftermarket to be up high single-digits to low double digits driven by growth in passenger air travel and mods and upgrades volume.”

“Starting with Collins. We expect full year sales to be up low single-digits on an adjusted basis and up mid-single-digits organically.”

“All in, we expect free cash flow to be between $7 billion to $7.5 billion in 2025.”

“Finally, we expect powder metal compensation impacts to be between $1.1 billion and $1.3 billion, which is up around $100 million year-over-year at the midpoint.”

“We also see a headwind of approximately $900 million, primarily driven by the absence of an R&D tax-related benefit in the prior year and higher cash taxes in 2025.”

“Next, the onetime legal and contract matters that we paid last year will not repeat in 2025, resulting in a tailwind of approximately $1.5 billion.”

“This also includes CapEx where we expect to invest between $2.5 billion and $2.7 billion during the year as we continue to expand capacity and accelerate automation efforts to support our long-term organic growth.”

“Specific to working capital, we expect a year-over-year improvement of approximately $1.3 billion, with the majority coming from inventory and contract assets as we deliver commercial OE product, achieve defense delivery milestones and improve our supplier inputs and material throughput.”

“Combined, this will drive an operational improvement of approximately $2.3 billion.”

“And finally, we also expect a $0.16 headwind from other items, which is primarily comprised of $0.06 of higher corporate expenses as we invest in our digital systems and capabilities and $0.05 of higher taxes.”

“Partially offsetting these items is approximately $0.15 from lower FAS/CAS and nonservice pension income, driven primarily by the actions we've taken to improve the funded status of our plans, as well as $0.06 from a higher share count.”

“And due to the progress we've made on paying down debt from the accelerated share repurchases completed in 2024, we expect a tailwind from lower interest of about $0.05.”

“Included in this segment growth is a headwind of roughly $0.07 associated with the divestitures we completed last year and the expected actuation divestiture this year.”

“Starting at the segment level, at the midpoint of our outlook range, operating profit growth of 12% is expected to drive approximately $0.66 of EPS growth.”

“We have a plan this year to deploy another 40 use cases.”