US, Oct 21 : US aerospace and defence contractors Northrop Grumman and RTX raised their full-year 2026 profit forecasts on Tuesday, supported by strong demand for military equipment and record order backlogs. GE Aerospace also increased its annual earnings outlook for the second time this year, reflecting continued strength in commercial aircraft engines and related services.
Northrop Grumman shares climbed 7.2% in early trading, while RTX advanced 2.4%. GE Aerospace shares, however, fell 4.9% after its implied fourth quarter earnings outlook came in below market expectations.
The latest results highlight the resilience of the US aerospace and defence sector amid heightened geopolitical tensions, sustained military expenditure and continued investment in aircraft maintenance, engines and replacement parts.
RTX reported a 14% increase in sales at its Raytheon defence business, driven by higher volumes across naval programmes and land- and air-defence systems. Key programmes contributing to growth included Patriot air defence systems, Standard Missile and Tomahawk cruise missiles.
RTX Chief Financial Officer Neil Mitchill said global demand remained strong across the company’s products and services. The company reported a record order backlog of $340 billion, representing an increase of 36% from a year earlier.
Northrop Grumman also recorded significant growth in its defence-related operations. Sales at its Aeronautics Systems division increased 14%, supported by higher production and deliveries associated with the B-21 Raider stealth bomber and F-35 fighter jet programmes.
The company secured $16.4 billion in new contracts during the quarter, with orders reaching 1.5 times its billings. Demand remained strong across several major programmes, including the Sentinel intercontinental ballistic missile system, F-35 fighter jets, Virginia-class submarines and classified defence projects.
Northrop’s total order backlog reached a record $109.6 billion as of September 30, reflecting sustained demand for advanced military platforms and strategic defence capabilities. RTX also secured $81 billion in new commercial and defence awards during the quarter, further strengthening its order pipeline.
Both companies benefited from a broader increase in military procurement as governments respond to evolving security challenges and invest in modernising their armed forces.
Commercial aviation continued to provide another important source of revenue. RTX reported sustained demand for airline maintenance services and its Pratt & Whitney aircraft engines and components, despite rising fuel costs putting pressure on airline profitability.
GE Aerospace experienced similar momentum, with revenue from its commercial engines and services business increasing by more than 20% to $10.34 billion. The performance reflected continued demand for engine maintenance, repairs and aftermarket support as airlines seek to keep their fleets operational.
However, GE Aerospace warned that persistently elevated fuel prices could prompt airlines to reduce flight activity. Such a slowdown could affect demand for engine repairs, spare parts and replacement engines, potentially weighing on future commercial aviation growth.
Northrop Grumman raised its 2026 adjusted earnings-per-share forecast to between $29.35 and $29.75, compared with its earlier estimate of $28.60 to $29.10.
RTX increased its adjusted earnings-per-share guidance to a range of $7.65 to $7.75, from its previous projection of $7.10 to $7.25. The company also raised its expected annual sales to between $97 billion and $97.5 billion, up from its earlier range of $95 billion to $96 billion.
GE Aerospace now expects adjusted earnings of $8.00 to $8.10 per share for 2026, compared with its previous forecast of $7.65 to $7.85. The revised projection also exceeded analysts’ expectations of $7.92 per share, according to data compiled by LSEG.
The improved outlooks underline the importance of defence contracts and commercial aviation services to the companies’ financial performance. While military programmes are providing long-term revenue visibility through substantial order pipelines, the commercial aerospace business remains sensitive to fuel prices, airline capacity decisions and broader economic conditions.
With defence spending remaining firm and demand for aircraft engines and maintenance services holding up, the companies are entering the remainder of 2026 with stronger earnings expectations and historically high backlogs.