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Ukraine and Middle East conflicts boost U.S. arms makers profits By Julian Nettlefold

by

Ukraine and Middle East conflicts boost U.S. arms makers profits. Weapons makers Lockheed Martin and RTX predicted strong profits for the rest of this year on Tuesday as their results benefited from surging demand for arms from conflicts in the Middle East and a protracted Russia-Ukraine war. Missiles, munitions and air defenses were important drivers for both companies, while Lockheed has been awarded a $12.5bn contract from the Pentagon, for a total of 296 F-35 jets.

To be sure, Northrop Grumman (NOC.N) trimmed its full-year 2025 sales outlook, but said that it would be more profitable than expected this year. The company said that timing of certain awards to build weapons dimmed the forecast. (Source: Reuters)

 

Boeing

29 Oct 25. Boeing Reports Third Quarter Results

Third Quarter 2025

  • 737 stabilized production at 38 per month; jointly agreed with FAA in October to increase to 42 per month
  • Revenue increased to $23.3bn primarily reflecting 160 commercial deliveries
  • Earnings reflects impact of $4.9bn charge associated with updated 777X certification timing
  • Operating cash flow of $1.1 bn and free cash flow (non-GAAP)* of $0.2 bn
  • Total company backlog grew to $636bn, including over 5,900 commercial airplanes

The Boeing Company [NYSE: BA] recorded third quarter revenue of $23.3bn, reflecting improved operational performance and higher commercial delivery volume. GAAP loss per share of ($7.14) and core loss per share (non-GAAP)* of ($7.47) primarily reflect a pre-tax earnings charge of $4.9 bn on the 777X program, which increased the loss per share by $6.45. The company reported operating cash flow of $1.1bn and free cash flow (non-GAAP)* of $0.2 bn. Total company backlog at quarter end was $636bn.

“With a sustained focus on safety and quality, we achieved important milestones in our recovery as we generated positive free cash flow in the quarter and jointly agreed with the FAA in October to increase 737 production to 42 per month,” said Kelly Ortberg, Boeing president and chief executive officer. “While we are disappointed in the 777X schedule delay, the airplane continues to perform well in flight testing, and we remain focused on the work ahead to complete our development programs and stabilize our operations in order to fully recover our company’s performance and restore trust with all of our stakeholders.”

Operating cash flow was $1.1bn in the quarter reflecting higher commercial deliveries, as well as working capital timing.

Cash and investments in marketable securities totaled $23.0bn, which remained stable compared to the prior quarter. The company maintains access to credit facilities of $10.0bn, which remain undrawn.

Segment Results

Commercial Airplanes

Commercial Airplanes third quarter revenue increased to $11.1 bn primarily reflecting higher deliveries. Third quarter operating margin was impacted by a charge on the 777X program.

The 737 program stabilized production at 38 per month in the quarter and jointly agreed with the Federal Aviation Administration in October to increase to 42 per month. The 787 program continued stabilizing production at seven per month and progressed on previously-announced investments to expand South Carolina operations. During the quarter, the company updated its assessment of the 777-9 certification timeline and now anticipates first delivery in 2027, resulting in a pre-tax earnings charge of $4.9bn.

Commercial Airplanes booked 161 net orders in the quarter, including 50 787 airplanes for Turkish Airlines and 30 737-8 airplanes for Norwegian Group. Commercial Airplanes delivered 160 airplanes, the highest quarterly total since 2018, and backlog included over 5,900 airplanes valued at $535bn.

Defense, Space & Security

Defense, Space & Security third quarter revenue of $6.9 bn and operating margin of 1.7 percent reflect stabilizing operational performance and higher volume.

During the quarter, Defense, Space & Security secured a contract from the U.S. Space Force to enhance strategic satellite communication capabilities and partnered with the Royal Australian Air Force to successfully demonstrate autonomous operational capabilities of the MQ-28 Ghost Bat. Backlog at Defense, Space & Security grew to $76bn with 20 percent representing orders from customers outside the U.S.

Global Services

Global Services third quarter revenue was $5.4 bn driven by higher volume. Operating margin of 17.5 percent primarily reflects favorable commercial volume and mix.

In the quarter, Global Services captured an award from the U.S. Navy for the repair of F/A-18 aircraft landing gear and announced a strategic collaboration agreement with Korean Air focused on advancing predictive maintenance analytics.

 

General Dynamics

General Dynamics Reports Third-Quarter 2025 Financial Results

October 24, 2025 Press Release

  • Revenue $12.9bn, up 10.6% from year-ago quarter
  • Diluted EPS $3.88, up 15.8% from year-ago quarter
  • $2.1 bn cash from operating activities, 199% of net earnings
  • Very strong order activity in all four segments

 

General Dynamics (NYSE: GD) today reported third-quarter 2025 operating earnings of $1.3bn, or $3.88 per diluted share (EPS), on revenue of $12.9 bn. Compared with the year-ago quarter, revenue increased 10.6%, operating earnings increased 12.7%, and diluted EPS increased 15.8%. Operating margin of 10.3% was a 20-basis-point expansion from the year-ago quarter and a 30-basis-point expansion sequentially.

“Each of our four segments grew earnings and backlog in the quarter, reflecting solid execution coupled with growing demand,” said Phebe Novakovic, chairman and chief executive officer. “The Aerospace segment in particular performed impressively, growing revenue 30.3% and expanding margins by 100 basis points from the same period a year ago, with order activity for business jets remaining very strong.”

Cash and Capital Deployment

Net cash provided by operating activities in the quarter totaled $2.1bn, or 199% of net earnings. During the quarter, the company paid $403m in dividends and invested $212m in capital expenditures, ending the quarter with $8bn in total debt and $2.5 bn in cash and equivalents on hand.

Orders and Backlog

Orders totaled $19.3 bn in the quarter on a companywide basis. Consolidated book-to-bill ratio, defined as orders divided by revenue, was 1.5-to-1 for the quarter. Book-to-bill was 1.6-to-1 for the defense segments and 1.3-to-1 for the Aerospace segment.

Total estimated contract value, the sum of all backlog components, was $167.7bn at the end of the quarter. This includes backlog of $109.9 bn and estimated potential contract value, representing management’s estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, of $57.8bn.

 

Honeywell 

23 Oct 25. Honeywell (NASDAQ: HON) today announced results for the third quarter that met or exceeded the company’s guidance. The company also raised its full-year organic growth and adjusted earnings per share guidance ranges and updated its free cash flow guidance range, including the impact of spinning off its advanced materials business.

  • Sales of $10.4 Bn, Reported Sales Up 7%, Organic1 Sales Up 6%, Exceeding High End of Previous Guidance
  • Earnings Per Share of $2.86 and Adjusted Earnings Per Share1 of $2.82, Exceeding High End of Previous Guidance
  • Orders Up 22%, Led by Strength in Aerospace Technologies and Energy and Sustainability Solutions
  • Company Raises Full-Year Organic Growth and Adjusted Earnings Per Share Guidance, Including Impact from Advanced Materials Spin
  • Announced New Segmentation and Simplified Structure Focused on Cohesive Business Models and Aligned to Post-Separation Automation Pure-Play Strategy, Expected Beginning First Quarter 2026
  • Separations Progressing on Track with Spin-Off of Solstice Advanced Materials Set for October 30, 2025

The company reported third-quarter year-over-year sales growth of 7% and organic1 sales growth of 6%, led by double-digit organic sales growth in commercial aftermarket and defense and space. Operating income decreased 6% and segment profit1 increased 5% to $2.4 bn led by growth in Energy and Sustainability Solutions and Building Automation. Operating margin contracted 220 basis points to 16.9% and segment margin1 contracted 50 basis points to 23.1%, meeting the high end of previous guidance. Earnings per share for the third quarter was $2.86, up 32% year over year, and adjusted earnings per share1 was $2.82, up 9% year over year. Operating cash flow was $3.3 bn, up 65% year over year, and free cash flow1 was $1.5 bn, down 16% year over year.

Vimal Kapur, chairman and chief executive officer of Honeywell, commented, “As we progressed toward separating into three industry-leading public companies, we drove strong financial results and unlocked new value creation opportunities during the third quarter. Increased orders across our business segments pushed the company’s total backlog to another record high and reinforced the benefit of the new, innovative solutions we are delivering for customers. All of this translated to us exceeding the high end of our guidance for both organic growth and adjusted earnings per share in the quarter.”

Kapur added, “Looking ahead, we are well positioned to continue building on our momentum and value creation efforts in the fourth quarter. Today, we are raising our full-year 2025 adjusted earnings per share guidance even while separating Solstice Advanced Materials at the end of October. We will remain focused on our compelling opportunities to deliver outcomes-based solutions to customers and are encouraged by the recent execution of our connected offerings through our Honeywell Forge platform, driving increased recurring revenue in our portfolio.”

As a result of the company’s third-quarter performance and management’s outlook for the remainder of the year, Honeywell updated its full-year sales, segment margin2, adjusted earnings per share2,3, and free cash flow1 guidance. Guidance now includes the impact of the Solstice Advanced Materials spin-off, set for completion on October 30, 2025, which is expected to reduce full-year sales compared to the prior year by $0.7 bn, adjusted earnings per share2,3 by $0.21, and free cash flow1 by $0.2bn.

Full-year sales are now expected to be $40.7 bn to $40.9 bn with organic1 sales growth of approximately 6%. Segment margin2 is expected to be in the range of 22.9% to 23.0%, with segment margin2 expansion of 30 to 40 basis points year over year. Adjusted earnings per share2,3 is now expected to be in the range of $10.60 to $10.70, up 10 cents at the midpoint from the prior guidance range. Operating cash flow is now expected to be in the range of $6.4 bn to $6.8 bn, with free cash flow1 in the range of $5.2bn to $5.6bn.

Excluding the impact of the Bombardier agreement4 signed in the fourth quarter of 2024, the company expects organic sales1 growth of approximately 5%, segment margin2 down 40 to 30 basis points year over year, and adjusted earnings per share2,3 up approximately 3% year over year. The company expects adjusted earnings per share growth of 5% to 6% when excluding both the impact of the Bombardier agreement4 and the October spin-off of Solstice Advanced Materials.

Portfolio Transformation

In February, Honeywell announced that its Board of Directors concluded its comprehensive portfolio review and decided to pursue a separation of its Automation and Aerospace businesses. The planned separation, coupled with the upcoming spin of Solstice Advanced Materials, will result in three publicly-listed industry leaders and is on track to be fully completed in the second half of 2026.

In preparation for the separation, Honeywell took several steps during and subsequent to the quarter to accelerate value creation and further simplify its operations and balance sheet, including:

  • Most recently, the company announced its reorganization into a simplified structure for its automation businesses with three reporting segments – Building Automation, Process Automation and Technology, and Industrial Automation – expected beginning first quarter 2026. The new segments will be focused on cohesive business models and aligned to the company’s post-separation automation pure-play strategy. The company will continue to report Aerospace Technologies as a reporting segment through the planned separation in the second half of 2026.
  • In October, the company announced the divestiture of its Bendix-related legacy asbestos liabilities. In combination with the July termination of an indemnification and reimbursement agreement with Resideo related to legacy environmental liabilities for which Honeywell received $1.6 bn, these transactions will increase management capacity and free up capital to pursue new value-enhancing opportunities.
  • In July, the company initiated an evaluation of strategic alternatives for its productivity solutions and services and warehouse and workflow solutions businesses as part of its process to simplify its portfolio.
  • Also during the quarter, the company announced that Quantinuum raised over $600 m at a $10 bn pre-money valuation to fund the advance of quantum computing at scale.

Third-Quarter PerformanceHoneywell sales for the third quarter were up 7% year over year on a reported basis and 6% on an organic1 basis year over year. The third-quarter financial results can be found in Tables 2 and 3.

Aerospace Technologies sales for the third quarter grew 12% organically1 year over year, led by strong performance in commercial aftermarket and defense and space. Commercial aftermarket sales increased 19% from the previous year, supported by ongoing supply chain unlock, with balanced growth across business jet and air transport end markets. Defense and space grew 10% year over year, its seventh consecutive quarter of double-digit growth, as global demand remains elevated. Commercial original equipment returned to growth in the quarter on higher shipment volumes. Overall backlog increased year over year as orders grew at a strong double-digit rate. Segment margin declined 160 basis points to 26.1% as commercial excellence and volume leverage were more than offset by cost inflation and the impact of acquisitions.

Industrial Automation sales for the third quarter grew 1% year over year on an organic basis and 2% sequentially excluding the effect of the May personal protective equipment divestiture. Sensing sales increased 6% from the prior year, growing for a fourth consecutive quarter on continued strength in healthcare sensors. Warehouse and workflow solutions grew 2% in the quarter with strong double-digit orders growth. Process solutions sales were flat year over year as growth in smart energy and thermal solutions was offset by challenging project demand. Productivity solutions and services declined 3%, driven by ongoing weakness in Europe. Segment margin contracted 150 basis points year over year to 18.8% as cost inflation more than offset commercial excellence and productivity actions.

Building Automation sales for the third quarter increased 7% organically1 from the previous year. Building solutions delivered growth of 7%, led by continued gains in North America and the Middle East. Building products grew 6%, highlighted by a fourth consecutive quarter of double-digit growth in fire products. Orders increased both year over year and sequentially with balanced performance between building solutions and building products. Segment margin expanded 80 basis points from the prior year to 26.7%, supported by volume leverage and commercial excellence net of inflation.

Energy and Sustainability Solutions sales for the third quarter decreased 2% year over year on an organic basis. Advanced materials grew 5% in the quarter, driven by strength in refrigerants. UOP sales declined 13% as anticipated licensing delays and lower catalyst shipment volumes offset continued growth in sustainability solutions. Orders grew double digits in the quarter, with strong performance in both advanced materials and UOP. Segment margin remained flat year over year at 24.5% as a one-time U.S. government reimbursement of past legal costs and accretion from acquisitions were offset by cost inflation and volume deleverage in UOP.

 

Lockheed Martin

21 Oct 25. Lockheed Martin lifts 2025 forecasts on robust defense demand. U.S. defense contractor Lockheed Martin raised its 2025 forecast for revenue and profit on Tuesday, driven by sustained demand for its fighter jets and munitions amid escalating geopolitical tensions.

Shares of the company initially rose 3.5%, but returned to almost no change in premarket trading in New York. Weapons makers are benefiting from surging demand for arms as a result of simmering conflicts in the Middle East and a protracted Russia-Ukraine war. Lockheed, which makes the F-35 stealth fighters, said its aeronautics segment sales jumped 11.9% to $7.26bn in the third quarter. It secured a long-awaited $12.5bn contract from the Pentagon last month, for a total of 296 F-35 jets. Lockheed has also clinched some large agreements recently, including an about $11bn navy contract to build up to 99 CH-53K King Stallion helicopters, and a nearly $10bn contract for Patriot missiles. The commitments underscore a growing need for the U.S. government and its allies to replenish stockpiles and load up on new weapons. In contrast, during the second quarter, Lockheed grappled with a $1.6bn charge, predominantly due to difficulties in its Aeronautics unit and international helicopter programs in its Sikorsky segment, which hurt shares. Lockheed, the largest defense contractor in the world, is also vying for a slice of the Trump administration’s $175bn marquee Golden Dome missile shield, for which the Pentagon began seeking contractors last month. The company’s total revenue rose 8.8% to $18.61bn in the third quarter, above analysts’ average estimate of $18.56 bn, per data compiled by LSEG.

Profit per share came in at $6.95, also beating expectations of $6.36.

Lockheed now expects a profit of $22.15 to $22.35 per share for 2025, compared with its previous estimate of $21.70 to $22.00. The company also raised the lower end of its sales outlook to $74.25 bn from $73.75 bn, while maintaining the higher end at $74.75 bn. (Source: Reuters)

 

Lockheed Martin Reports Third Quarter 2025 Financial Results

  • Sales of $18.6bn
  • Net earnings of $1.6 bn, or $6.95 per share
  • Cash from operations of $3.7 bn and free cash flow of $3.3 bn
  • Returned $1.8 bn of cash to shareholders through dividends and share repurchases
  • Increased share repurchase authority by $2 bn to a total authorization of $9 bn
  • Increased quarterly dividend by 5% to $3.45 per share
  • Record backlog of $179 bn
  • Updates 2025 outlook

Lockheed Martin Corporation [NYSE: LMT] today reported third quarter 2025 sales of $18.6 bn, compared to $17.1bn in the third quarter of 2024. Net earnings in the third quarter of 2025 were $1.6bn, or $6.95 per share, compared to $1.6bn, or $6.80 per share, in the third quarter of 2024. Cash from operations was $3.7bn in the third quarter of 2025, compared to $2.4bn in the third quarter of 2024. Free cash flow was $3.3bn in the third quarter of 2025, compared to $2.1 bn in the third quarter of 2024.

“Based on the effectiveness and reliability of our products and systems, strong demand from Lockheed Martin’s customers—both in the United States and among our allies—continues. As a result of this unprecedented demand, we are increasing production capacity significantly across a wide range of our lines of business,” said Lockheed Martin Chairman, President, and CEO Jim Taiclet. “Our record $179 bn backlog—more than two and a half years of sales—underscores the trust our customers place in us and underpins our company’s long‑term growth prospects. Major contract awards for the CH‑53K and PAC‑3 MSE programs are the largest ever for our Rotary and Mission Systems and Missiles and Fire Control businesses, respectively. Additionally, in close collaboration with our customers, we finalized the contracts covering Lots 18 and 19 of the F‑35 early in the fourth quarter. Lockheed Martin has delivered a record 143 F‑35 Lightning II jets through the end of the third quarter.

“Looking ahead, we are investing aggressively in both new digital technologies and physical production capacity needed to meet the top defense priorities of the United States and its allies—and we are doing so in partnership with a number of leading technology partners, large and small. Major national‑defense initiatives like the Golden Dome for America demand proven leadership in a wide range of skills, including integrated air and missile defense, space warfare and highly secure command‑and‑control systems. Lockheed Martin is the capable leader and integrator across industry for these types of initiatives. Moreover, our disciplined capital deployment continues to provide robust, reliable rewards for our shareholders, highlighted by 23 consecutive years of dividend increases. Together, these results reflect a company built for performance today and poised for growth tomorrow.”

Cash from operations in the third quarter of 2025 was $3.7 bn with free cash flow of $3.3 bn compared to $2.4 bn with $2.1 bn in free cash flow in the third quarter of 2024. The increase in cash from operations was primarily due to a decrease in working capital driven by the F‑35 Lots 18‑19 contract; and lower tax payments, reflecting the impact of the One Big Beautiful Bill Act (the Tax Act).

The company’s cash activities in the quarter ended Sept. 28, 2025, included the following:

  • paying cash dividends of $765m;
  • paying $1.0bn to repurchase 2.3m shares;
  • paying off $1.4bn of commercial paper; and
  • receiving net proceeds from debt issuances of $1,985m.

As previously announced on Oct. 9, 2025, the company’s board authorized the repurchase of its common stock up to an additional $2.0bn, increasing the total authorization for potential future common stock repurchases to $9.1bn. The stock repurchase program does not have an expiration date and may be amended or terminated by the board of directors at any time. The amount of shares ultimately purchased and the timing of purchases are at the discretion of management and subject to compliance with applicable law and regulation.

Additionally, on Oct. 9, 2025, the company authorized a fourth quarter dividend payment of $3.45 per share, representing an increase of $0.15 per share, or 5%, over the prior quarterly dividend payment.

2025 Financial Outlook

The company’s financial outlook for 2025 and other sections of this news release contain forward-looking statements, which reflect the company’s judgment based on the information available at the time of this news release. The financial outlook for 2025 does not include potential impacts of government shutdown,  or Executive Orders issued by the Administration. Additionally, it is the company’s practice not to incorporate adjustments into its financial outlook for proposed or potential acquisitions, divestitures, ventures, future gains or losses related to changes in valuations of the company’s net assets and liabilities for deferred compensation plans or early-stage company investments, pension annuity contracts or discretionary contributions, financing transactions, changes in law, or new accounting standards until such items have been consummated, enacted or adopted. Actual results may differ materially from those projected. For additional factors that may impact the company’s actual results, refer to the “Forward-Looking Statements” section in this news release.

Segment Results

The company operates in four business segments organized based on the nature of products and services offered: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. The following table presents summary operating results of the company’s business segments and reconciles these amounts to the company’s consolidated financial results.

For information on factors impacting comparability of the company’s segment sales, operating profit and operating margins, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2024.

Consolidated net profit booking rate adjustments increased segment operating profit by approximately $365m in the quarter ended Sept. 28, 2025. Consolidated net profit booking rate adjustments increased segment operating profit by approximately $375 m in the quarter ended Sept. 29, 2024, which included an $85m favorable profit rate adjustment for a claim associated with a contract to modernize and install new engines in C-5 Galaxy aircraft and losses of $80m recognized on a classified program at Aeronautics.

Aeronautics 

Aeronautics’ sales during the quarter ended Sept. 28, 2025 increased $769m, or 12%, compared to the same period in 2024. This increase was primarily attributable to higher sales of $965 m on the F-35 program due to higher volume on production and sustainment contracts and the delays in receiving additional contractual authorization and funding under the Lots 18-19 contract in the third quarter of 2024. This increase was partially offset by lower sales of $140m on classified contracts due to lower volume.

Aeronautics’ operating profit during the quarter ended Sept. 28, 2025 increased $23m, or 3%, compared to the same period in 2024. This increase was attributable to a $70m increase from higher volume, as described above, partially offset by a $45m decrease in profit booking rate adjustments. The decrease in profit booking rate adjustments was primarily due to $40 m of unfavorable profit adjustments on C-130 programs. In addition, profit booking rate adjustments from 2024 that did not recur include a favorable profit rate adjustments of $85 m for a claim associated with a C-5 Galaxy contract and an unfavorable profit rate adjustment of $80 m on a classified program.

Missiles and Fire Control

MFC’s sales during the quarter ended Sept. 28, 2025 increased $449m, or 14%, compared to the same period in 2024. This increase was primarily attributable to higher sales of $280 m on tactical and strike missile programs due to production ramp-up on Joint Air-to-Surface Standoff Missile (JASSM), Long Range Anti-Ship Missile (LRASM) and precision fires programs; and $235 m for integrated air and missile defense programs primarily due to production ramp-up on PAC-3.

MFC’s operating profit during the quarter ended Sept. 28, 2025 increased $54m, or 12%, compared to the same period in 2024. This increase was primarily attributable to a $45m increase from production ramp-up as described above.

Rotary and Mission Systems

RMS’ sales during the quarter ended Sept. 28, 2025 were comparable to the same period in 2024. Sales increased $190 m on Sikorsky helicopter programs due to higher production volume on Black Hawk programs and $40 m on various C6ISR programs due to higher volume. These increases were offset by lower sales of $155m on integrated warfare systems and sensors (IWSS) programs due to lower volume on the Aegis and CSC programs, and $75 m for various training, logistics and simulation (TLS) programs due to lower volume.

RMS’ operating profit during the quarter ended Sept. 28, 2025 increased $23m, or 5%, compared to the same period in 2024. This increase was primarily attributable to favorable contract mix at Sikorsky.

Space

Space’s sales during the quarter ended Sept. 28, 2025 increased $281m, or 9%, compared to the same period in 2024. This increase was primarily attributable to higher sales of $160 m for strategic and missile defense programs due to higher volume on the Fleet Ballistic Missile (FBM) and Next Generation Interceptor (NGI) programs; and $70 m on national security space programs due to classified volume.

Space’s operating profit during the quarter ended Sept. 28, 2025 increased $59m, or 22%, compared to the same period in 2024. This increase was attributable to two primary factors: a $45 m increase in profit booking rate adjustments and a $20m increase in volume, as described above. The increase in profit booking rate adjustments was primarily due to higher net favorable profit adjustments on the FBM program.

Total equity earnings (ULA) represented approximately $5m, or 2% of Space’s operating profit during both the quarter ended Sept. 28, 2025 and 2024.

Income Taxes

The company’s effective income tax rate was 16.5% and 15.4% for the quarters ended Sept. 28, 2025 and Sept. 29, 2024. The higher effective income tax rate for the quarter ended Sept. 28, 2025 was attributable to the Tax Act primarily driven by lower tax deductions for foreign derived intangible income (FDII) partially offset by the favorable resolution of certain federal income tax audit items with the Internal Revenue Service. The rates for all periods benefited from research and development tax credits, dividends paid to the company’s defined contribution plans with an employee stock ownership plan feature, tax deductions for FDII and employee equity awards.

Use of Non-GAAP Financial Measures

This news release contains the following non-generally accepted accounting principles (non-GAAP) financial measures (as defined by U.S. Securities and Exchange Commission (SEC) Regulation G). While management believes that these non-GAAP financial measures may be useful in evaluating the financial performance of the company, this information should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. In addition, the company’s definitions for non-GAAP financial measures may differ from similarly titled measures used by other companies or analysts.

Business segment operating profit

Business segment operating profit represents operating profit from the company’s business segments before unallocated income and expense. This measure is used by the company’s senior management in evaluating the performance of its business segments and is a performance goal in the company’s annual incentive plan. Business segment operating margin is calculated by dividing business segment operating profit by sales. The table below reconciles the non-GAAP measure business segment operating profit with the most directly comparable GAAP financial measure, consolidated operating profit.

Free cash flow

Free cash flow is cash from operations less capital expenditures. The company’s capital expenditures are comprised of equipment and facilities infrastructure and information technology (inclusive of costs for the development or purchase of internal-use software that are capitalized). The company uses free cash flow to evaluate its business performance and overall liquidity and it is a performance goal in the company’s annual and long-term incentive plans. The company believes free cash flow is a useful measure for investors because it represents the amount of cash generated from operations after reinvesting in the business and that may be available to return to stockholders and creditors (through dividends, stock repurchases and debt repayments) or available to fund acquisitions or other investments. The entire free cash flow amount is not necessarily available for discretionary expenditures, however, because it does not account for certain mandatory expenditures, such as the repayment of maturing debt and future pension contributions.

Northrop Grumman

Northrop Grumman Reports Third Quarter 2025 Financial Results

  • Net awards increase to $12.2bn; book to bill ratio of 1.17
  • Sales increase 4 percent to $10.4bn, organic sales1 increase 5 percent
  • Operating margin rate of 11.9 percent; segment operating margin rate1 of 12.3 percent
  • Diluted earnings per share (EPS) increase 10 percent to $7.67
  • Company raises 2025 MTM-adjusted EPS guidance range by $0.65 to $25.65 to $26.05

21 Oct 25. Northrop Grumman Corporation (NYSE: NOC) reported third quarter 2025 sales increased 4 percent to $10.4 bn, as compared with $10.0 bn in the third quarter of 2024. Third quarter 2025 sales reflect continued strong demand for our global capabilities. Third quarter 2025 net earnings totaled $1.1bn, or $7.67 per diluted share, as compared with $1.0 bn, or $7.00 per diluted share, in the third quarter of 2024. Third quarter 2025 net earnings reflect strong segment operating performance.

“The momentum we are building in our business drove strong third quarter performance to achieve our financial objectives for mid-single-digit growth, expanding segment margins, and growing cash flows year over year. As a result of this performance and our positive outlook for the remainder of the year, we are once again increasing our 2025 EPS guidance,” said Kathy Warden, chair, chief executive officer and president. “I am excited about our continued progress in responding with urgency to our customers’ needs. We’re demonstrating our team can rapidly innovate the way we work and the products we deliver, while also providing the quality and performance customers expect from Northrop Grumman. As we look to the future, we expect global demand to remain strong for our portfolio, with growth in each of our four business segments next year.”

Third quarter 2025 sales increased $427m, or 4 percent, primarily driven by higher sales at Mission Systems, Defense Systems and Aeronautics Systems, partially offset by lower sales at Space Systems due, in part, to the wind-down of work on certain Space programs, as discussed in our segment operating results below. Operating Income and Margin Rate Third quarter 2025 operating income increased $122m, or 11 percent, primarily due to a $131m increase in segment operating income. Operating margin rate increased to 11.9 percent from 11.2 percent principally due to a higher segment operating margin rate.

Segment Operating Income and Margin Rate

Third quarter 2025 segment operating income increased $131m, or 11 percent, primarily due to higher operating income at Mission Systems and Defense Systems, partially offset by lower operating income at Space Systems. Segment operating margin rate increased to 12.3 percent from 11.5 percent due to higher operating margin rates at Mission Systems and Defense Systems, partially offset by lower operating margin rates at Space Systems and Aeronautics Systems. Federal and Foreign Income Taxes On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. Key income taxrelated provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes. The company recognized the income tax effects of the OBBBA in its third quarter 2025 financial statements. Third quarter 2025 income tax expense increased $61m, or 38 percent, due to a higher effective tax rate (ETR) and higher earnings before income taxes. The third quarter 2025 ETR increased to 16.9 percent from 13.6 percent primarily due to the prior year ETR reflecting a net reduction in tax reserves largely due to a federal court decision in 2024 as well as a reduction in research credits in the current year due to enactment of the OBBBA, partially offset by lower interest expense on unrecognized tax benefits. Net Earnings Third quarter 2025 net earnings increased $74 m, or 7 percent, primarily due to the $122 m increase in operating income described above as well as a $62m increase in returns on marketable securities, partially offset by a $61m increase in income tax expense and a $3m reduction in the non-operating FAS pension benefit.

Cash Flows

Third quarter 2025 net cash provided by operating activities increased $466m as compared with the same period in 2024 primarily due to higher earnings and improved trade working capital due principally to the timing of billings and collections. Third quarter 2025 free cash flow1 increased $526m, or 72 percent, due to an increase in net cash provided by operating activities and lower capital expenditures. Awards and Backlog Third quarter 2025 net awards totaled $12.2bn and backlog totaled $91.4bn. Significant third quarter new awards include $4.5bn for restricted programs (primarily at Space Systems, Mission Systems and Aeronautics Systems), $1.8bn for Ground-Based Midcourse Defense Weapon System (GWS), $0.5bn for F-35 (primarily at Aeronautics Systems and Mission Systems), and $0.4bn for Virginia Class submarines. Segment Operating Results Effective July 1, 2024, the company realigned the Strategic Deterrent Systems (SDS) division, which includes the Sentinel program, from Space Systems to Defense Systems.

Effective January 1, 2025, the company realigned the Strike and Surveillance Aircraft Solutions (SSAS) business unit from Defense Systems to Aeronautics Systems. These realignments are reflected in the financial information contained in this report.

AERONAUTICS SYSTEMS

Sales

Third quarter 2025 sales increased $181m, or 6 percent, primarily due to a $110m increase on the E-130J TACAMO (“TACAMO”) program as it ramps up and a $105m increase on the F-35 program largely driven by materials volume, partially offset by a decrease on F/A-18 as production nears completion. Operating Income Third quarter 2025 operating income decreased $4m, or 1 percent, due to a lower operating margin rate, partially offset by higher sales. Operating margin rate decreased to 9.7 percent from 10.4 percent, primarily due to lower net contract margin adjustments.

DEFENSE SYSTEMS

Sales Third quarter 2025 sales increased $259m, or 14 percent, primarily due to higher volume on armament programs, including military ammunition programs, increased volume from new awards across the Integrated Battle Command System (IBCS) program portfolio and higher sales on Sentinel. These increases were partially offset by a $70m reduction in sales related to the training services divestiture. Operating Income Third quarter 2025 operating income increased $74m, or 46 percent, primarily due to a higher operating margin rate and higher sales. Operating margin rate increased to 11.4 percent from 8.9 percent principally due to higher net EAC adjustments and changes in mix toward more fixed-price contracts.

MISSION SYSTEMS

Sales

Third quarter 2025 sales increased $270m, or 10 percent, primarily due to higher sales on restricted advanced microelectronics programs, higher volume on marine systems programs and ramp-up on international ground-based radar programs. Operating Income Third quarter 2025 operating income increased $125m, or 32 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 16.7 percent from 13.8 percent, principally due to higher net EAC adjustments, including a $68m favorable EAC adjustment in the restricted advanced microelectronics portfolio largely driven by program efficiencies and risk mitigations.

SPACE SYSTEMS

Sales

Third quarter 2025 sales decreased $172m, or 6 percent, primarily due to wind-down of work on the restricted space and Next Generation Interceptor (NGI) programs, which reduced sales by $124m, as well as lower volume on Space Development Agency (SDA) satellite programs. These decreases were partially offset by a $100m increase for Commercial Resupply Services (CRS) missions. Operating Income Third quarter 2025 operating income decreased $47 m, or 14 percent, primarily due to a lower operating margin rate and lower sales. Operating margin rate decreased to 11.0 percent from 12.0 percent principally due to lower net EAC adjustments, including a prior year $39m favorable EAC adjustment on the Habitation and Logistics Outpost program, partially offset by sales growth on programs with accretive margin rates.

RTX

21 Oct 25. RTX raises 2025 forecast as strong demand offsets tariff worries. Aerospace and defense giant RTX raised its full-year profit and revenue forecast on Tuesday, as rising demand for its missiles and aftermarket services bolstered its ability to weather negative fallout from tariffs.

Shares of the company rose 6.3% before the bell, as it also beat Wall Street expectations for third-quarter results.

 

U.S. President Donald Trump’s global tariff offensive had pushed RTX to slash its profit outlook in July, and the company expects $500m in tariff costs this year.

U.S. Commerce Secretary Howard Lutnick, meanwhile, said in August that the Trump administration was considering taking stakes in defense contractors.

“We’re not having those conversations with the government. What we are having conversations with the government about is their need for increased capacity,” RTX Chief Financial Officer Neil Mitchill told Reuters in an interview. (Source: Reuters)

 

RTX Reports Q3 2025 Results

RTX 

21 Oct 25. RTX (NYSE: RTX) reports third quarter 2025 results.

Third quarter 2025

  • Sales of $22.5 bn, up 12 percent versus prior year, and up 13 percent organically* excluding divestitures
  • GAAP EPS of $1.41, including $0.29 of acquisition accounting adjustments, $0.01 cent of restructuring, and a $0.01 benefit from other net significant and/or non-recurring items
  • Adjusted EPS* of $1.70, up 17 percent versus prior year
  • Operating cash flow of $4.6bn; free cash flow* of $4.0bn
  • Company backlog of $251bn, including $148bn of commercial and $103bn of defense
  • Returned $0.9bn of capital to shareowners and paid down $2.9bn of debt
  • Completed the divestiture of Collins’ actuation and flight control business

Updates outlook for full year 2025

  • Adjusted sales* of $86.5 – $87.0 bn, up from $84.75 – $85.5 bn
  • Organic sales growth* of 8 to 9 percent, up from 6 to 7 percent
  • Adjusted EPS* of $6.10 – $6.20, up from $5.80 – $5.95
  • Confirms free cash flow* of $7.0 – $7.5bn

“Strong execution in the third quarter enabled us to deliver double-digit organic sales growth across all three segments and our sixth consecutive quarter of year-over-year adjusted segment margin expansion,” said RTX Chairman and CEO Chris Calio. “We also received $37bn of new awards in the quarter, reflecting robust global demand for our products and supporting long-term growth for RTX.”

“Based on our year-to-date performance and ongoing demand strength, we are raising our full year outlook for adjusted sales* and EPS*. We remain focused on executing on our $251bn backlog and increasing our output to support the ramp across critical programs, while investing in next-generation products and services that meet the needs of our customers.”

Third quarter 2025

RTX third quarter reported and adjusted sales were $22.5bn, up 12 percent over the prior year. GAAP EPS of $1.41 included $0.29 of acquisition accounting adjustments, $0.01 of restructuring, and a $0.01 benefit from other net significant and/or non-recurring items. Adjusted EPS of $1.70 was up 17 percent versus the prior year.

The company reported net income attributable to common shareowners in the third quarter of $1.9bn which included $0.4 bn of acquisition accounting adjustments. Adjusted net income of $2.3bn was up 19 percent versus the prior year driven by adjusted segment operating profit growth across all three segments. Operating cash flow in the third quarter was $4.6bn and capital expenditures were $0.6 bn, resulting in free cash flow of $4.0bn.

Summary Financial Results – Operations Attributable to Common Shareowners

Collins Aerospace third quarter 2025 reported and adjusted sales of $7,621 m were up 8 percent versus the prior year. Excluding the impact of divestitures, the increase in adjusted sales was driven by a 16 percent increase in commercial OE, a 13 percent increase in commercial aftermarket and a 6 percent increase in defense. The increase in commercial OE sales was driven primarily by higher volume on narrowbody platforms. The increase in commercial aftermarket sales was driven by growth in parts and repairs and retrofit activity. The increase in defense sales was driven by higher volume across multiple programs and platforms, including the Survivable Airborne Operations Center.

Collins Aerospace reported operating profit of $1,260m was up 19 percent versus the prior year. Reported operating profit included a gain on the sale of the actuation and flight control business. On an adjusted basis, operating profit of $1,194m was up 9 percent versus the prior year. Drop through on higher commercial aftermarket, defense, and commercial OE volume and lower R&D expense more than offset the impact of unfavorable commercial OE mix and higher tariffs across the business.

Pratt & Whitney

Pratt & Whitney third quarter reported and adjusted sales of $8,423m were up 16 percent versus the prior year. The sales growth was driven by a 5 percent increase in commercial OE, a 23 percent increase in commercial aftermarket, and a 15 percent increase in military. The increase in commercial OE sales was driven by higher volume in large commercial engines and favorable mix in Pratt Canada, while the increase in commercial aftermarket was driven by higher volume in both large commercial engines and Pratt Canada. Military sales were driven by the F135 program, including higher volume associated with the Lot 18 contract award in the quarter.

Pratt & Whitney reported operating profit of $751m was up 35 percent versus the prior year. Adjusted operating profit of $751m was up 26 percent versus the prior year. The increase was driven by drop through on higher commercial aftermarket and military volume which more than offset the impact from increased large commercial OE deliveries, higher SG&A expense, and higher tariffs across the business.

Raytheon

Raytheon third quarter reported and adjusted sales of $7,045m were up 10 percent versus the prior year. This increase was driven by higher volume on land and air defense systems, including international Patriot as well as higher volume on naval programs, including multiple classified programs, SM-6, and Evolved SeaSparrow Missile.

Raytheon reported operating profit of $859m was up 33 percent versus the prior year primarily driven by favorable program mix, including international Patriot, improved net productivity, and higher volume. Adjusted operating profit* of $859 m was up 30 percent versus the prior year.

 

Textron

Textron Reports Third Quarter 2025 Results

October 23, 2025

  • EPS of $1.31; adjusted EPS of $1.55, up from $1.40 in the prior year
  • Revenues of $3.6 bn, up 5%, or $175m, compared to the prior year
  • Backlog increased $2.2bn driven by Bell and Textron Systems

Textron Inc. (NYSE: TXT) today reported third quarter 2025 income from continuing operations of $1.31 per share, compared to $1.18 in the third quarter of 2024. Adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $1.55 per share for the third quarter of 2025, compared to $1.40 per share in the third quarter of 2024.

“Overall, third quarter revenue was up 5% for Textron with higher revenues at Aviation, Bell, and Textron Systems,” said Textron Chairman and CEO Scott C. Donnelly. “Higher Aviation deliveries, acceleration of MV-75 at Bell, and solid performance at Systems all contributed to a strong quarter.”

Cash Flow

Net cash provided by operating activities of the manufacturing group for the third quarter was $348m, compared to $208 m last year. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, totaled $281 m for the third quarter, compared to $147m last year.

In the quarter, Textron returned $206m to shareholders through share repurchases. Year to date, Textron has returned $635m to shareholders through share repurchases.

Outlook

Textron reiterated its expectation for full-year 2025 GAAP earnings per share from continuing operations to be in the range of $5.19 to $5.39, or $6.00 to $6.20 on an adjusted basis, which is reconciled to GAAP in an attachment to this release. Manufacturing cash flow before pension contributions, a non-GAAP measure, is reiterated to be in the range of $900 m to $1.0 bn.

Third Quarter Segment Results

Textron Aviation

Textron Aviation’s revenues were $1.5bn, up 10%, or $138 m from last year’s third quarter, reflecting higher aircraft revenues of $116m and higher aftermarket parts and services revenues of $22 m. The increase in aircraft revenues was largely due to higher volume and mix, which included higher Citation jet and commercial turboprop volume, partially offset by lower defense volume.

Textron Aviation delivered 42 jets in the quarter, up from 41 in the third quarter of 2024, and 39 commercial turboprops, up from 25 in last year’s third quarter.

Segment profit was $179m in the third quarter, up $51m from a year ago, largely due to higher volume and mix.

Textron Aviation backlog at the end of the third quarter was $7.7bn.

Bell

Bell revenues were $1.0bn, up 10%, or $97m from the third quarter of 2024. The revenue increase in the quarter was driven by higher military revenues of $128m, primarily due to higher volume from the U.S. Army’s MV-75 program, partially offset by lower commercial revenues of $31m, primarily due to volume.

Bell delivered 30 commercial helicopters in the quarter, down from 44 in last year’s third quarter.

Segment profit of $92m was down $6 m from last year’s third quarter.

Bell backlog ended the third quarter at $8.2bn, an increase of $1.3bn from the prior quarter primarily reflecting the award for the prototype testing and evaluation phase of the MV-75 program.

Textron Systems

Textron Systems revenues were $307m, up $6m from last year’s third quarter, which included higher volume on the Ship-to-Shore Connector program.

Segment profit of $52m was up $13m, compared with the third quarter of 2024, largely due to a gain resulting from the early termination of a vendor contract.

Textron Systems backlog ended the third quarter at $3.2bn, an increase of $980 m reflecting new contract awards for several programs.

Industrial

Industrial revenues were $761m, down $79m from last year’s third quarter, reflecting $88 m in lower revenues related to the divestiture of the Powersports business.

Segment profit of $31m was down $1 m from the third quarter of 2024.

Textron eAviation

Textron eAviation segment revenues were $5m in the third quarter of 2025, as compared to $6m in last year’s third quarter, and segment loss was $15m, as compared with a segment loss of $18m in the third quarter of 2024.

Finance

Finance segment revenues were $26m, and profit was $18m in the third quarter of 2025, as compared to segment revenues of $12m and profit of $5m in the third quarter of 2024. The increase in revenues and segment profit was largely due to gains on the disposition of non-captive assets.