RTX's $289 Billion Backlog Is Mainly Commercial, Not Defense. Here's Why That Split Is the Real Story.
Key PointsCommercial aerospace strength supports RTX's defense business and financial flexibility.
The split between RTX's commercial aerospace and defense backlogs has proved advantageous for the company, driven not only by a robust recovery in commercial aerospace but also by enhancements in the defense sector. Historically, commercial aerospace was considered cyclical, with periods of growth and contraction, while defense was viewed as steady and low-growth, with the U.S. government as its main customer.
This combination led to the merger of United Technologies' commercial aerospace division and Raytheon's defense-focused segment, forming RTX. The earnings and cash flow from defense operations provide a cushion during economic downturns, allowing RTX to continue investing in long-cycle solutions and thrive when the economic cycle turns upward.
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