RTX and Northrop raise their 2026 forecasts on record backlogs

RTX raised its 2026 forecasts as aerospace and defence demand drove a record backlog, Reuters reported¹. The company cited growing demand for aircraft engines and parts and sustained military spending amid heightened geopolitical tensions³. In its third-quarter results release, RTX said demand for its products remains robust⁶.

Northrop Grumman lifted its 2026 profit forecast on strong defence demand and a record backlog, Reuters reported². Northrop, which makes the B-21 Raider bomber and parts for the F-35 fighter jet, has been benefiting from rising US and allied military spending amid heightened geopolitical tensions^2,5. Northrop’s management said it was “confident” in the company’s “new record backlog, well-positioned portfolio and investments”, in remarks carried by KFGO⁴.

Yahoo Finance reported that both contractors came out with strong third-quarter earnings results and raised their annual profit outlooks⁷. The same report asked whether US rearmament will trigger a surge in defence spending⁷.

Why it matters to investors

The results arrive as the sector’s shares have pulled back. The Wall Street Journal published a guide on how to play the retreat in defence stocks, noting that there is bipartisan support for military spending⁸. The Journal argued that even a squeezed defence budget might not be such a bad thing for some of the companies involved⁸.

Record backlogs at both companies give investors a measure of demand that is already contracted, rather than promised^1,2. The two reports point to the same drivers: engine and parts demand on the aerospace side and allied as well as US military budgets on the defence side^3,5.

Washington’s budget fight is the next variable. The White House is seeking approval for at least $350 billion in new military spending after the November elections, before the current Congress’ term ends, Militarnyi reported⁹. Republicans have threatened to block that funding on conditions of their own, the outlet reported⁹.

What to watch

The first question is whether the request for $350 billion passes before the current Congress’ term ends⁹. The second is whether the Journal’s view that bipartisan support cushions the sector holds up if the budget is squeezed⁸.

For RTX, the civil side matters as much as the military one: engine and parts demand helped drive the higher forecast^1,3. For Northrop, the programmes Reuters names are the B-21 bomber and parts for the F-35².