RTX cuts 2025 profit forecast as tariff costs weigh

• RTX forecasts tariff costs at around $500 million in 2025
• Company now sees 2025 adjusted profit at $5.80-$5.95 per share
• Prior forecast was for adjusted profit of $6.00-$6.15 per share

By Utkarsh Shetti and Mike Stone

July 22 (Reuters) - RTX RTX.N cut its 2025 profit forecast on Tuesday as the aerospace and defense giant took a hit from U.S. President Donald Trump's trade war despite strong demand for its engines and aftermarket services.

Shares of the company were down 2.7% by 10:25 a.m. EDT (1425 GMT).

Trump's imposition of tariffs on imports of aluminum and steel has shrouded the markets with uncertainty, threatening to add pressure on an already-strained supply chain.

"We have not seen any major impact on our demand signals," RTX Chief Financial Officer Neil Mitchill said in an interview. "But ultimately over the long term, we do expect to see some pressure on pricing and other costs in businesses as we look to recoup this headwind."

RTX had warned of an $850 million hit from the trade war, based on an assumption that steel and aluminum tariffs would remain at 25%, China tariffs at 145% and global reciprocal tariffs at 10%.

Since then, levies on steel and aluminum have doubled to 50% and Trump has unveiled new tariffs on most trading partners, but those on China have significantly reduced.

Mitchill said the company now believes that tariff costs, net of mitigation efforts, will be around $500 million in 2025 alone, and about $125 million of that has already been incurred.

The company now expects adjusted profit between $5.80 and $5.95 per share for 2025, down from its prior forecast of $6.00 and $6.15 per share.

Maintenance and repair service providers for commercial aircraft have banked on a shortage of new jets, as production delays force airlines to operate an older, cost-intensive fleet.

Demand in its defense business has remained strong in the face of growing geopolitical tensions around the world. RTX's Patriot air defense systems have been widely used on the battlefield in Ukraine to counter missile threats from Russia.

Raytheon, RTX's defense unit, reported sales that rose 8% to $7 billion in the second quarter.

RTX has enjoyed strong demand in all its business segments, particularly as it sees an increased appetite for new commercial jet engines and maintenance work on existing ones, leading it to raise its adjusted 2025 sales forecast.

It now expects between $84.75 and $85.5 billion in 2025, from its previous forecast of $83 billion to $84 billion.

The company said its focus is now on ramping production and capacity.

RTX's Pratt and Whitney unit, which produces engines for Airbus' A320neo jets and competes with CFM International, saw sales rise 12%.

Pratt has struggled with output problems in recent years and is in the middle of an inspection drive for potentially flawed components in its geared turbofan engines that have grounded hundreds of planes in recent months.

The Arlington, Virginia-based company reported a 9% rise in total revenue to $21.6 billion, compared with analysts' average estimate of $20.63 billion, according to data compiled by LSEG.

Its adjusted per-share profit stood at $1.56 in the quarter. Analysts expected $1.44.