2026-10-20

RTX Revenue Up 11%, GE Aerospace Orders Up 49% - Both Beat and Raise Guidance Again Despite Premarket Jitters

Written & reviewed by the TradeSmrt editorial team · 2026-10-20

In this article

What Happened
Why the Feared Quarter Turned Into Another Beat
What to Take Away From This
FAQ
Sources

What Happened

Before the opening bell on Tuesday, October 20, RTX Corporation (NYSE: RTX) and GE Aerospace (NYSE: GE) both reported third-quarter 2026 results. The night before, both stocks had already slid in premarket trading despite neither company having released a single number yet, with options markets pricing in swings of roughly 5% for each name - a sign of just how much tension had built up around the reports. Once the actual figures hit the wire, though, they undercut that caution. RTX posted third-quarter revenue of $25.0 billion, up 11% year over year, with adjusted earnings per share of $2.26, up 33% from a year earlier (a figure that includes a $0.25 one-time benefit tied to IEEPA tariff-cost recovery). GAAP EPS came in at $1.89. GE Aerospace delivered an equally strong quarter: new orders hit $19.0 billion, up 49% year over year, GAAP revenue reached $14.1 billion (up 16%), and adjusted revenue came in at $13.3 billion (up 18%). GAAP profit rose 12% to $2.8 billion, operating profit climbed 30% to $3.0 billion, GAAP EPS reached $2.32 (up 14%), and adjusted EPS hit $2.25 (up 36%).

Neither company stopped at simply beating expectations. RTX raised its full-year 2026 adjusted EPS guidance to a range of $7.65 to $7.75, up from the prior $7.10 to $7.25, and lifted its adjusted sales outlook to $97.0 billion to $97.5 billion from $95.0 billion to $96.0 billion. That marks the company's fourth guidance raise of 2026. GE Aerospace followed the same script: CEO Larry Culp said directly in the earnings release that the company is "raising our 2026 guidance across the board," and the company lifted its full-year operating profit outlook by roughly $1 billion. The commercial engine business backed that up with hard numbers of its own - LEAP engine deliveries are up 26% year-to-date. In short, the question hanging over markets heading into Tuesday's open - whether this would finally be the quarter where one of these two serial over-achievers failed to clear an increasingly high bar - was, at least on the numbers, answered with a no.

Why the Feared Quarter Turned Into Another Beat

To understand why Tuesday's results landed the way they did, it helps to revisit exactly what the market was worried about the night before. The concern was never really about either company's underlying business - it was about the bar itself, built up by quarter after quarter of raised guidance throughout 2026. By the time markets opened Tuesday, RTX and GE Aerospace weren't being compared to their own year-ago results anymore; they were being compared to the market's accumulated assumption about how much better each quarter would get. Under that kind of pricing, even a genuinely strong number can fall short if the guidance raise that comes with it isn't large enough. GE Aerospace has lived through exactly that scenario before: in the first quarter of 2026, it beat EPS estimates by roughly 13% and still saw its stock fall, because investors zeroed in on margin pressure and supply-chain commentary buried in the report rather than the headline beat.

What stands out about this particular quarter is how differently the two companies' growth showed up in the numbers. RTX's profitability grew far faster than its revenue - a 33% jump in adjusted EPS against 11% revenue growth - which points to cost discipline and a favorable mix shift (a growing share of higher-margin commercial aerospace and defense contracts) doing more of the work than top-line expansion alone. That said, $0.25 of the EPS gain came from the one-time IEEPA tariff recovery, so the underlying improvement, while still solid, is less dramatic than the headline growth rate suggests. GE Aerospace showed the opposite pattern: orders grew far faster than revenue (49% versus 16-18%), signaling that the backlog feeding future years of revenue is building even faster than the business is converting that demand into current-quarter sales. Notably, GE's GAAP operating margin actually fell 80 basis points to 19.9%, even as its adjusted operating margin expanded a full 220 basis points to 22.5%. That gap - almost certainly driven by one-time charges or acquisition-related amortization sitting in the GAAP figures but stripped out of the adjusted ones - is exactly why investors typically lean on adjusted metrics when judging a company's real-time operating health.

The bigger takeaway from Tuesday is that premarket fear and actual earnings direction aren't the same thing. RTX and defense peer Northrop Grumman (NYSE: NOC) had both slid roughly 1.9% and 2% respectively in premarket trading the night before, not because of any specific new information about the results, but because of accumulated positioning fatigue after so many consecutive beat-and-raise quarters, combined with sector-wide hedging ahead of a dense cluster of reports. When the actual numbers landed, both companies cleared expectations again and raised guidance again - meaning the scenario the market was bracing for Monday night simply didn't play out. It's also a useful reminder of why professional traders treat a large options-implied move as a measure of uncertainty around an earnings date, not a forecast of which direction the stock will actually go.

None of this guarantees smooth sailing from here. Every additional guidance raise resets the bar higher for the next one, and both companies remain structurally dependent on two macro narratives - the ongoing recovery in commercial aviation demand and elevated defense spending tied to geopolitical tensions - that could shift at any time. But for at least one more quarter, in a market dynamic where repeated success makes the next hurdle progressively harder to clear, both companies managed to clear it anyway.

What to Take Away From This

A premarket selloff ahead of earnings is a reflection of market psychology, not a forecast. RTX, GE Aerospace, and Northrop Grumman all traded lower before the open on accumulated positioning concerns, and the actual results went the opposite direction. Don't read premarket moves as advance information about what a report will say.
Check whether a headline EPS growth rate is carrying a one-time item. A full 11 cents of RTX's $0.25-boosted adjusted EPS gain traced to a tariff-cost recovery rather than core operations. Stripping out one-time benefits is a useful habit for judging the real quality of a beat.
Watch the gap between GAAP and adjusted metrics. GE Aerospace's GAAP operating margin fell while its adjusted margin rose sharply - understanding why (one-time charges, amortization, and similar items) gives a clearer read on the business's real operating trajectory than either number alone.
Order growth and revenue growth tell different stories. GE Aerospace's orders outpacing revenue by a wide margin signals that future-year growth visibility is improving faster than current-quarter results show - a detail easy to miss if you only look at the trailing-quarter top line.
Remember that each guidance raise resets the bar for the next one. RTX's latest hike was its fourth of 2026. The more consistently a company raises guidance, the higher the threshold for the next "beat" becomes - a dynamic worth tracking for any stock riding a long streak of good news.

FAQ

If both companies beat estimates, why did their stocks fall in premarket trading the night before?

Premarket softness ahead of a scheduled earnings report typically reflects investors positioning around how much good news is already baked into the share price, not new information about the actual results. After a long streak of beat-and-raise quarters, some investors trim positions or hedge beforehand simply because the bar for "good enough" has climbed so high that even a strong quarter carries real risk of disappointing. The actual post-earnings stock reaction depends on intraday trading and is best checked against a live quote once markets are open.

Why is RTX's adjusted EPS so much higher than its GAAP EPS this quarter?

Adjusted EPS strips out one-time or non-operating items - things like acquisition-related amortization or restructuring charges - to show a clearer picture of a company's core operating performance. This quarter, RTX's adjusted EPS ($2.26) came in well above its GAAP EPS ($1.89), reflecting items excluded from the adjusted figure, including the one-time tariff-related benefit. Looking at both numbers together helps separate a genuine operating improvement from one-off boosts.

Does four consecutive guidance raises mean RTX will keep beating expectations going forward?

Not necessarily. Each guidance raise mechanically increases the bar for the next quarter, which is part of why repeated beats can become harder to sustain over time rather than easier. Both RTX and GE Aerospace are also leaning heavily on two macro tailwinds - a commercial aviation demand recovery and elevated global defense spending tied to geopolitical tensions - and a slowdown in either one could interrupt the guidance-raise streak regardless of how the underlying business is executing.

Sources

This article is an original synthesis and analysis based on the company filings and reporting below, not a reproduction of the original material. Please check the source filings directly for the most current figures.

⚠️ This article is for informational purposes only and is not investment advice. Market conditions change constantly - always verify the latest data before making investment decisions.