As geopolitical tensions rise around the world, defense contractors like RTX, which specializes in commercial aircraft systems and defense products and weapons, are seeing their sales pick up.
RTX said on Tuesday that it now has a $218 billion backlog for its commercial aircraft and defense products—owing to an uptick in passenger air-travel activity as well as new U.S. and international weapons and defense contracts. On an call with investors following its fourth quarter earnings report, RTX CEO Christopher Calio said that it had more than 30 defense systems being used in active combat around the world, and that there had been “tremendous” demand for its Patriot missile defense system, F135 propulsion system, and Coyote kinetic effector, among other products.
Part of the backlog—which is 11% larger than it was at the end of 2023—is new business. RTX said it had received more than $112 billion in new contracts in 2024 alone. The defense portion of the backlog increased 19% year over year, from $78 million at the end of 2023. Calio also pointed to increased defense spending from NATO nations right now, highlighting Poland—which has recently said it was spending some 5% of its gross domestic product on defense—as well as countries in the Indo-Pacific.
In 2024, RTX posted $21.6 billion in sales in the fourth quarter, up from $19.8 billion in the same period in 2023. Its adjusted earnings per share were $1.54, up from $1.29 in 2023. Shares of the company had climbed 2.6% by Tuesday’s market close.
Calio said on the call that RTX had been using AI to quicken the pace of product-testing cycles within the company. Within its avionics department, Calio said RTX was using generative AI for things like product testing, first article inspections, and RFP (request for proposal) responses, and he said that it had helped cut software-testing cycle times within its avionics business by 3x—all while maintaining RTX’s “same quality standards.” He said that RTX planned to use generative AI for another 40 use cases this year.
