RTX Faces Tariff Headwinds Despite Growth in Engine Deliveries

RTX

Commercial and military engine shipments rise, but RTX warns of $850mn tariff impact

RTX, the US aerospace conglomerate, expects up to $850 million in profit impact from tariffs in 2025, even as its commercial engine deliveries increased. In the first quarter, RTX — which includes Pratt & Whitney, Collins Aerospace, and Raytheon — saw strong demand for aircraft engines and aftermarket services.

Strong engine output and MRO demand offset by trade pressures

RTX reported a 7.8% increase in large commercial engine (LCE) shipments to 250 units in Q1, alongside a 35% surge in maintenance, repair, and overhaul (MRO) output. Meanwhile, military engine deliveries rose 19%, and aftermarket sales jumped 28%, driven by older fleets operating longer amid aircraft delivery delays.

However, the company warned that ongoing US-China tariff tensions may significantly pressure earnings. The projected $850mn hit assumes current tariffs remain and includes mitigations such as duty drawbacks, free trade zones, and temporary imports under bond. RTX said it may pass some costs to customers or shift production.

RTX maintains cautious optimism amid supply chain and cost challenges

Despite a 10% drop in quarterly profit to $1.5 billion, RTX remains cautiously optimistic due to sustained aircraft utilization and large backlogs from airframers. The company has addressed supply constraints, including heat exchanger production for Boeing’s 787 Dreamliner. CEO Christopher Calio emphasized flexibility, stating RTX will "execute on the playbook" if market conditions shift.

The Metalnomist Commentary

RTX’s growth in engine output and MRO services shows resilience, but looming trade tensions pose serious margin risks. Strategic flexibility in production and sourcing will be key as global aerospace players navigate the turbulent tariff landscape.