⚠ A Margin a Third of the Rival'sHigh threat

RTX (RTX) — threat to the moat

GE Aerospace earned 26.6% on commercial engines in 2025 and Pratt & Whitney 7.9% on almost the same sales, a gap the recall alone does not explain.

Pratt & Whitney's margin is not low because engines are a low-margin business. GE Aerospace's Commercial Engines & Services segment earned $8,861 million on $33,314 million of revenue in 2025, a 26.6% margin1. Pratt & Whitney earned $2,596 million on $32,916 million2, 7.9%3. The two had almost the same sales and more than a threefold difference in profit.

Commercial engine segment profit margin, 2025 (%)26.6%GE Aerospace CES7.9%Pratt & WhitneyGE Aerospace and RTX Forms 10-K FY2025; Pratt margin calculated
Same sales, a third of the profit rate.

Some of the gap is structure. Pratt & Whitney includes military engines and the Canadian small-engine business, and its GTF fleet is younger. Some of it is the recall, whose customer compensation ran through 2025. But the core fact stands: in the one market where the two meet head to head, the A320neo family, Pratt & Whitney's engine is the other option to GE's LEAP4.

A thinner margin limits what the segment can spend to defend its position, on durability upgrades, on discounts and on repair capacity.

The recall does not explain the whole gap even on RTX's own adjusted figures. Pratt & Whitney's adjusted operating margin was 8.3% in 20255, only slightly above its reported 7.9%. GE Aerospace's commercial engine segment margin was 23.7% in 2023 and 26.2% in 20246, before rising again in 2025. The difference has persisted through three years in which both companies' aftermarkets were growing.

The gap is the number to watch. Pratt & Whitney's margin was 8.3% in the second quarter of 202678; if it is not above 10% by the time the recall compensation ends, the gap is structural rather than temporary.

References
  1. ReportedGE Aerospace's Commercial Engines & Services segment earned $8,861 million on $33,314 million of revenue in 2025, a 26.6% margin.
    GE Aerospace Form 10-K for fiscal 2025 - Commercial Engines & Services segment revenue of $33,314 million and segment profit of $8,861 million, a 26.6% segment profit margin. — FY2025 · publ. January 2026 · source ↗
  2. ReportedPratt & Whitney earned $2,596 million on $32,916 million, 7.9%.
    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 - Pratt & Whitney: segment sales, operating profit, organic drivers, customer types, assets and capital expenditure. — FY2023-FY2025 · publ. 6 February 2026 · source ↗
  3. Moat Explorer calcPratt & Whitney earned $2,596 million on $32,916 million, 7.9%.
    Moat Explorer calculation from RTX's segment results (Forms 10-K FY2023 and FY2025, Q2 2026 earnings release; $ millions). Operating margins: Collins 2,380 / 21,152 = 11.3% (2021), 2,816 / 23,052 = 12.2% (2022), 4,923 / 30,196 = 16.3% (2025), H1 2026 2,613 / 15,812 = 16.5%, Q2 2026 1,306 / 8,210 = 15.9%, Q1 2026 (first half less Q2) 1,307 / 7,602 = 17.2%; Pratt & Whitney 454 / 18,150 = 2.5% (2021), 1,075 / 20,530 = 5.2% (2022), 2,015 / 28,066 = 7.2% (2024), 2,596 / 32,916 = 7.9% (2025), H1 2026 1,448 / 17,062 = 8.5%, Q2 2026 738 / 8,889 = 8.3%; Raytheon 3,399 / 26,611 = 12.8% (2021), 2,448 / 25,176 = 9.7% (2022), 2,379 / 26,350 = 9.0% (2023), 3,227 / 28,043 = 11.5% (2025), Q2 2026 1,042 / 8,269 = 12.6%; Q1 2026 Raytheon sales 15,214 - 8,269 = 6,945. Growth 2021-2025: Collins 30,196 / 21,152 - 1 = 43% (about 9% a year), operating profit 4,923 / 2,380 = 2.07 times; Pratt & Whitney 32,916 / 18,150 - 1 = 81%, 2025 32,916 / 28,066 - 1 = 17%; Raytheon 28,043 / 26,611 - 1 = 5%. 2025 shares of segment sales (91,155): Pratt & Whitney 36%, Collins 33%, Raytheon 31%; of segment operating profit (10,746): Collins 4,923 = 45.8%, Raytheon 3,227 = 30.0%, Pratt & Whitney 2,596 = 24.2%. Operating profit over segment assets 2025: Collins 4,923 / 71,680 = 6.9%, Raytheon 3,227 / 44,795 = 7.2%, Pratt & Whitney 2,596 / 52,482 = 4.9%. Pratt & Whitney services share 14,449 / 32,916 = 44%; services growth 14,449 / 9,717 = 1.49 times. Collins commercial share 18,858 / 27,585 = 68%; Collins government sales 7,061 + 436 + 1,230 = 8,727, 8,727 / 27,585 = 32%. Raytheon U.S. government share 19,237 / 27,892 = 69%. Collins services share 6,118 / 27,585 = 22%. Pratt & Whitney segment assets 52,482 / 44,307 - 1 = 18%. Pratt & Whitney 2025 defence bookings other than F135: about 9.0 - 2.9 - 2.4 = 3.7 billion. GE Aerospace Commercial Engines & Services profit 8,861 against Pratt & Whitney 2,596: 3.4 times; margins 26.6% against 7.9%. — 2021-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in RTX's Forms 10-K and 10-Q, earnings releases, earnings call and market data; operands shown in the source line.
  4. Third-party estimateBut the core fact stands: in the one market where the two meet head to head, the A320neo family, Pratt & Whitney's engine is the other option to GE's LEAP.
    The Motley Fool, on GE Aerospace's LEAP deliveries - the LEAP as the sole engine on the Boeing 737 MAX and one of two options on the Airbus A320neo family, Pratt & Whitney's geared turbofan being the other. — August 2026 · publ. 28 August 2026 · source ↗
  5. ReportedPratt & Whitney's adjusted operating margin was 8.3% in 2025, only slightly above its reported 7.9%.
    RTX fourth-quarter and full-year 2025 earnings release, Form 8-K exhibit 99 - adjusted EPS of $6.29, free cash flow of $7,940 million, adjusted segment results and the January 2026 outlook. — FY2025 · publ. 27 January 2026 · source ↗
  6. ReportedGE Aerospace's commercial engine segment margin was 23.7% in 2023 and 26.2% in 2024, before rising again in 2025.
    GE Aerospace Form 10-K for fiscal 2025 - Commercial Engines & Services segment revenue of $33,314 million and segment profit of $8,861 million, a 26.6% segment profit margin. — FY2025 · publ. January 2026 · source ↗
  7. ReportedPratt & Whitney's margin was 8.3% in the second quarter of 2026; if it is not above 10% by the time the recall compensation ends, the gap is structural rather than temporary.
    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 ↗
  8. Moat Explorer calcPratt & Whitney's margin was 8.3% in the second quarter of 2026; if it is not above 10% by the time the recall compensation ends, the gap is structural rather than temporary.
    Moat Explorer calculation from RTX's segment results (Forms 10-K FY2023 and FY2025, Q2 2026 earnings release; $ millions). Operating margins: Collins 2,380 / 21,152 = 11.3% (2021), 2,816 / 23,052 = 12.2% (2022), 4,923 / 30,196 = 16.3% (2025), H1 2026 2,613 / 15,812 = 16.5%, Q2 2026 1,306 / 8,210 = 15.9%, Q1 2026 (first half less Q2) 1,307 / 7,602 = 17.2%; Pratt & Whitney 454 / 18,150 = 2.5% (2021), 1,075 / 20,530 = 5.2% (2022), 2,015 / 28,066 = 7.2% (2024), 2,596 / 32,916 = 7.9% (2025), H1 2026 1,448 / 17,062 = 8.5%, Q2 2026 738 / 8,889 = 8.3%; Raytheon 3,399 / 26,611 = 12.8% (2021), 2,448 / 25,176 = 9.7% (2022), 2,379 / 26,350 = 9.0% (2023), 3,227 / 28,043 = 11.5% (2025), Q2 2026 1,042 / 8,269 = 12.6%; Q1 2026 Raytheon sales 15,214 - 8,269 = 6,945. Growth 2021-2025: Collins 30,196 / 21,152 - 1 = 43% (about 9% a year), operating profit 4,923 / 2,380 = 2.07 times; Pratt & Whitney 32,916 / 18,150 - 1 = 81%, 2025 32,916 / 28,066 - 1 = 17%; Raytheon 28,043 / 26,611 - 1 = 5%. 2025 shares of segment sales (91,155): Pratt & Whitney 36%, Collins 33%, Raytheon 31%; of segment operating profit (10,746): Collins 4,923 = 45.8%, Raytheon 3,227 = 30.0%, Pratt & Whitney 2,596 = 24.2%. Operating profit over segment assets 2025: Collins 4,923 / 71,680 = 6.9%, Raytheon 3,227 / 44,795 = 7.2%, Pratt & Whitney 2,596 / 52,482 = 4.9%. Pratt & Whitney services share 14,449 / 32,916 = 44%; services growth 14,449 / 9,717 = 1.49 times. Collins commercial share 18,858 / 27,585 = 68%; Collins government sales 7,061 + 436 + 1,230 = 8,727, 8,727 / 27,585 = 32%. Raytheon U.S. government share 19,237 / 27,892 = 69%. Collins services share 6,118 / 27,585 = 22%. Pratt & Whitney segment assets 52,482 / 44,307 - 1 = 18%. Pratt & Whitney 2025 defence bookings other than F135: about 9.0 - 2.9 - 2.4 = 3.7 billion. GE Aerospace Commercial Engines & Services profit 8,861 against Pratt & Whitney 2,596: 3.4 times; margins 26.6% against 7.9%. — 2021-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in RTX's Forms 10-K and 10-Q, earnings releases, earnings call and market data; operands shown in the source line.
Sources
Generated September 28, 2026