⚠ Shrinking to Grow the MarginLow threat

RTX (RTX) — threat to the moat

Part of Collins's margin gain came from selling lower-margin units, which makes the trend look stronger than the underlying business.

A margin can rise because a business earns more or because it owns less. Collins has done some of both. It sold Goodrich Hoist and Winch for about $0.5 billion in 2024, its actuation business in 2025, and Simmonds Precision Products for about $0.8 billion in October 20251. RTX's 2025 filing lists those sales as the reason Collins's reported sales grew less than its organic sales2.

Collins divestitures, gross proceeds ($bn)about 0.5Hoist and Winch, 2024about 0.8Simmonds Precision, 2025RTX Form 10-K FY2025; actuation sale 2025 amount not shown
Small sales, but they flatter the margin.

Selling weaker units is sensible, and each sale is small against $30,196 million of segment sales3. But it flatters the margin trend: part of the rise from 14.6% to 16.3% in 2025 is the absence of businesses that earned less.

The pattern continues elsewhere in RTX, with Raytheon's Blue Canyon Technologies agreed for sale in June 2026 for $620 million4.

RTX has used disposals across the group, not only at Collins. The 2025 annual report lists the actuation business, Simmonds Precision Products, Goodrich Hoist and Winch and Raytheon's cybersecurity, intelligence and services business among recent sales5. Each is small; together they make the organic figures the better guide to how the franchise is actually growing.

The fair measure is organic growth with a rising margin together. Collins's organic sales grew $2.6 billion in 20256; if future margin gains arrive only in years with disposals, the portfolio is shrinking into its margin target rather than earning it.

References
  1. ReportedIt sold Goodrich Hoist and Winch for about $0.5 billion in 2024, its actuation business in 2025, and Simmonds Precision Products for about $0.8 billion in October 2025.
    RTX Form 10-K for fiscal 2025 - Item 1 business: the three segments and their products, the GTF family powering more than 2,600 aircraft for over 90 operators, the F135 as sole-source engine on all F-35 variants, GTF Advantage certification, the IAE collaboration shares, employees (about 180,000 in 52 countries, 69% in the U.S.) and the divested businesses. — FY2025 · publ. 6 February 2026 · source ↗
  2. ReportedRTX's 2025 filing lists those sales as the reason Collins's reported sales grew less than its organic sales.
    RTX Form 10-K for fiscal 2025 - Item 7 segment review and Note 20: net sales and operating profit by segment for 2023-2025, organic sales drivers (commercial aftermarket, OEM, military), sales by customer type, products and services, segment assets, capital expenditure and research and development - Collins Aerospace: segment sales, operating profit, organic drivers, customer types, assets and capital expenditure. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  3. ReportedSelling weaker units is sensible, and each sale is small against $30,196 million of segment sales.
    RTX Form 10-K for fiscal 2025 - Item 7 segment review and Note 20: net sales and operating profit by segment for 2023-2025, organic sales drivers (commercial aftermarket, OEM, military), sales by customer type, products and services, segment assets, capital expenditure and research and development - totals across segments: segment sales and profit, eliminations, acquisition accounting and FAS/CAS adjustments. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  4. ReportedThe pattern continues elsewhere in RTX, with Raytheon's Blue Canyon Technologies agreed for sale in June 2026 for $620 million.
    RTX second-quarter 2026 earnings release, Form 8-K exhibit 99 - sales of $24.7 billion, segment results, cash flow, balance sheet and raised 2026 outlook. — Q2 2026 · publ. 23 July 2026 · source ↗
  5. ReportedThe 2025 annual report lists the actuation business, Simmonds Precision Products, Goodrich Hoist and Winch and Raytheon's cybersecurity, intelligence and services business among recent sales.
    RTX Form 10-K for fiscal 2025 - Item 1 business: the three segments and their products, the GTF family powering more than 2,600 aircraft for over 90 operators, the F135 as sole-source engine on all F-35 variants, GTF Advantage certification, the IAE collaboration shares, employees (about 180,000 in 52 countries, 69% in the U.S.) and the divested businesses. — FY2025 · publ. 6 February 2026 · source ↗
  6. ReportedCollins's organic sales grew $2.6 billion in 2025; if future margin gains arrive only in years with disposals, the portfolio is shrinking into its margin target rather than earning it.
    RTX Form 10-K for fiscal 2025 - Item 7 segment review and Note 20: net sales and operating profit by segment for 2023-2025, organic sales drivers (commercial aftermarket, OEM, military), sales by customer type, products and services, segment assets, capital expenditure and research and development - Collins Aerospace: segment sales, operating profit, organic drivers, customer types, assets and capital expenditure. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
Sources
Generated September 28, 2026