Raytheon shares rebound 3% after Trump's threat to sever government contracts over buybacks

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President Trump called Raytheon “the least responsive” to Pentagon needs and threatened to terminate its government contracts unless the company invests in new plants and equipment rather than prioritizing its $10 billion buyback plan. Shares of Raytheon fell then rebounded more than 3% in after-hours trading.

1. Trump Threatens RTX’s Government Contracts Over Stock Buybacks

President Donald Trump publicly criticized RTX, formerly Raytheon, for prioritizing shareholder returns over Pentagon requirements. In a Truth Social post, Trump labeled RTX “the least responsive” defense contractor, citing its $10 billion buyback plan announced in 2023 and its uninterrupted dividend payments since 1936. He warned that unless RTX increases investment in new production plants and equipment, the company may lose existing and future U.S. government contracts. RTX shares dipped following the remarks before rebounding more than 3% in early after‐hours trading.

2. RTX Schedules Fourth Quarter and Full Year 2025 Earnings Release

RTX announced it will publish its fourth quarter and full year 2025 results on January 27, 2026, prior to market open. A conference call is set for 8:30 a.m. ET, during which management will discuss the 2025 financial performance and outlook for 2026. The company’s 2024 sales exceeded $80 billion, driven by its three core businesses—Collins Aerospace, Pratt & Whitney and Raytheon—and it employs more than 185,000 globally.

3. Strategic Outlook and Investor Considerations

Analysts point to RTX’s strong order backlog in integrated defense systems and the near‐term upside from new contract awards as key growth drivers. Despite trade-policy risks and supply‐chain pressures, the company’s valuation discount relative to peers and its track record of seven consecutive years of dividend increases bolster its appeal. Investors will watch capital‐allocation decisions closely, particularly any adjustments to the 2023 buyback program and guidance on plant and equipment spending following the Trump administration’s scrutiny.

Sources

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