Anabelle Colaco
23 Oct 2026

WASHINGTON, D.C.: Northrop Grumman and RTX raised their 2026 profit forecasts on October 20 as strong military demand pushed both U.S. defense contractors' backlogs to record levels.

Commercial aerospace demand also remained strong, helping RTX and rival engine maker GE Aerospace, which raised its full-year forecast for the second time this year.

Northrop shares jumped 7.2 percent in early trading, RTX gained 2.4 percent, and GE Aerospace fell 4.9 percent on lower-than-expected implied fourth-quarter earnings.

The results reflected sustained military spending amid heightened geopolitical tensions, as well as continued airline spending on maintenance, aircraft engines and parts.

Sales at RTX's Raytheon business rose 14 percent, driven by higher volumes in naval programs and land and air defense systems, including Patriot, Standard Missile and Tomahawk.

"We continue to see robust global demand for all of our products and services," RTX finance chief Neil Mitchill told Reuters on October 20, adding that the company had "another record backlog" of $340 billion, up 36 percent from a year earlier.

Northrop's Aeronautics Systems unit also posted a 14 percent sales increase, helped by higher sales of its B-21 Raider bomber and increased production of F-35 fighter jets.

The company secured $16.4 billion in new contracts during the quarter, with orders growing at 1.5 times its billings. Demand was driven by programs including Sentinel, the F-35, Virginia-class submarines and certain classified programs.

Northrop's backlog reached a record $109.6 billion as of September 30. RTX secured $81 billion in new commercial and defense awards, taking its backlog to a record $340 billion.

Commercial aviation drove further growth. RTX benefited from airline maintenance spending and demand for Pratt & Whitney aircraft engines and parts, while GE Aerospace's commercial engines and services revenue climbed more than 20 percent to $10.34 billion.

GE warned, however, that prolonged high fuel prices could lead airlines to fly less, weakening demand for engine repairs, spare parts, and spare engines.

Northrop now expects adjusted earnings of $29.35 to $29.75 per share in 2026, up from its previous forecast of $28.60 to $29.10.

RTX raised its adjusted earnings forecast to $7.65 to $7.75 per share from $7.10 to $7.25 and lifted its sales outlook to between $97 billion and $97.5 billion from $95 billion to $96 billion.

GE Aerospace increased its 2026 adjusted earnings forecast to $8.00 to $8.10 per share from $7.65 to $7.85, above analysts' expectation of $7.92.