The executive order issued on January 7 2026 by President Trump prohibits major defense contractors from issuing dividends or conducting stock buybacks if those actions would reduce investment in production capacity. RTX announced on January 9 that it would comply with the order and reaffirmed its commitment to invest in production facilities, signaling that it will prioritize defense production demands while maintaining a disciplined approach to shareholder returns.
RTX’s Q4 2024 results showed an adjusted earnings per share of $1.54, up 19% year‑over‑year, and sales of $80.8 billion, up 9% year‑over‑year. The company has a backlog of $251 billion and has returned $37 billion to shareholders since 2020. RTX plans $600 million in capacity expansion projects to meet the new regulatory requirements and to avoid being classified as “underperforming” by the Department of Defense.
The order could constrain RTX’s ability to return capital to shareholders until it demonstrates sufficient investment in production. RTX’s response signals that it will prioritize production capacity while maintaining a disciplined approach to shareholder returns, aiming to avoid the restrictions that would apply to underperforming contractors.
RTX’s 2025 outlook projects adjusted sales of $83.0–$84.0 billion and adjusted earnings per share of $6.00–$6.15, reflecting confidence in continued demand for its aerospace and defense products. The company expects the new order to have a limited impact on its guidance, provided it meets the capacity investment thresholds.
The executive order represents a significant shift in the regulatory environment for defense contractors. RTX’s proactive stance and investment plan position it to navigate the new rules while sustaining growth, making the announcement material for investors and stakeholders.
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