Episode Details

A companion deep dive on RTX's Q3 2026 print. Adjusted EPS of $2.26 beat consensus of $1.78 by 27% — but roughly $410 million of tariff cost recovery (about $250M at Collins Aerospace, $160M at Pratt & Whitney) did some of the lifting. We run the beat both ways: ex-item EPS of roughly $2.02 still clears consensus by about 13%, and the raised full-year guidance survives a full tariff haircut. The real story is Raytheon: backlog jumping from roughly $86B to $130B in one quarter on about $23B of Tomahawk and $14.3B of AMRAAM awards under previously established framework agreements — a book-to-bill of about 6.5x in the quarter and 2.9x over twelve months. Plus a segment-by-segment quality ranking of the guidance raise, and the watch list: GTF costs, Q4 cash conversion, remaining framework ceiling, and whether cap ex follows the backlog.