Record-breaking backlogs and strong demand for military systems, aircraft engines and maintenance services are boosting growth across the aerospace sector.
October 20, 2026 — U.S. aerospace and defense companies Northrop Grumman and RTX raised their annual profit forecasts on Tuesday, supported by strong military demand and record order backlogs. GE Aerospace also increased its full-year earnings outlook for the second time this year, reflecting continued strength in commercial aviation services.
The updated forecasts highlight the industry’s resilience amid heightened geopolitical tensions and sustained defense spending. Demand for aircraft engines, spare parts and airline maintenance services has also contributed to growth, although elevated fuel costs remain a potential challenge for commercial aviation.
Defense Demand Drives Record Backlogs
RTX reported a 14% increase in sales at its Raytheon division, fueled by higher volumes in naval programs and land- and air-defense systems, including Patriot, Standard Missile and Tomahawk.
The company’s finance chief, Neil Mitchill, told us that global demand remained strong. RTX’s backlog reached a record $340 billion, up 36% from a year earlier, following $81 billion in new commercial and defense awards.
Northrop Grumman also recorded strong growth. Sales at its Aeronautics Systems division rose 14%, supported by increased sales of the B-21 Raider bomber and higher F-35 fighter jet production.
The company secured $16.4 billion in new contracts during the quarter, with orders reaching 1.5 times its billings. Demand across programs including Sentinel, the F-35, Virginia-class submarines and certain classified projects contributed to the increase.
Northrop’s backlog climbed to a record $109.6 billion as of September 30.
Commercial Aviation Adds to Growth
Beyond defense programs, commercial aerospace services continued to support earnings at RTX and GE Aerospace.
RTX benefited from airline maintenance spending and demand for Pratt & Whitney aircraft engines and parts, even as rising fuel prices put pressure on airline profitability.
GE Aerospace reported that revenue from its commercial engines and services business increased by more than one-fifth to $10.34 billion.
However, the company cautioned that persistently high fuel prices could prompt airlines to reduce flight activity. Such a slowdown could weaken demand for engine repairs, spare parts and replacement engines.
Companies Raise Full-Year Earnings Targets
Northrop Grumman increased its 2026 adjusted earnings-per-share forecast to $29.35–$29.75, compared with its previous range of $28.60–$29.10.
RTX raised its adjusted earnings-per-share outlook to $7.65–$7.75, up from $7.10–$7.25. It also lifted its full-year sales forecast to $97 billion–$97.5 billion, compared with the earlier projection of $95 billion–$96 billion.
GE Aerospace now expects adjusted earnings of $8.00–$8.10 per share in 2026, compared with its previous forecast of $7.65–$7.85. The new range exceeded the $7.92 analyst consensus cited in LSEG data.
Investors React to the Updated Forecasts
Shares moved in different directions following the announcements. Northrop Grumman rose 7.2% in early trading, while RTX gained 2.4%. GE Aerospace shares fell 4.9%, as investors reacted to implied fourth-quarter earnings that were below expectations.
The contrasting market response illustrates that stronger annual forecasts do not necessarily guarantee positive share-price reactions, particularly when investors are evaluating the outlook for the remaining quarters.
With military procurement, commercial engine demand and maintenance spending continuing to support the sector, aerospace and defense contractors are entering the final months of 2026 with substantial order pipelines. The durability of commercial aviation demand, however, will remain sensitive to fuel prices and airline operating decisions.
Original article
Comments