The second quarter earnings season for defense contractors has wrapped up, revealing a broadly strong performance across the sector with a few notable exceptions.
RTX (NYSE:RTX), the aerospace and defense giant formerly focused on refrigeration technology, posted revenues of $24.71 billion, up 14.5% year on year, beating analyst expectations by 7.8%.
The company also delivered full-year EPS guidance that exceeded analyst expectations, rounding out what analysts described as an exceptional quarter for the Raytheon parent.
Despite the strong results, the stock has traded flat since the earnings report and currently sits at $196.75, suggesting markets had largely priced in the positive news ahead of time.
Across the 14 defense contractors tracked this quarter, revenues beat analysts’ consensus estimates by 4%, while next quarter’s revenue guidance came in 1.1% above consensus.
Even with those strong collective results, share prices across the group have declined on average by 2.8% since the latest earnings reports were released.
Huntington Ingalls (NYSE:HII) stood out as the strongest performer, reporting revenues of $3.42 billion, up 10.9% year on year, outperforming analyst expectations by 8.2%.
The builder of Nimitz-class aircraft carriers also beat analyst EPS estimates, though shares have traded sideways since the report and currently sit at $281.21.
At the other end of the spectrum, Parsons (NYSE:PSN) delivered the weakest performance, reporting revenues of $1.58 billion, flat year on year, falling short of analyst expectations by 1.9%.
Parsons also missed analyst expectations significantly on both full-year revenue guidance and full-year EBITDA guidance, making it the weakest performer across revenue growth, analyst estimate performance, and guidance in the group.
The market reacted sharply to Parsons’s disappointing quarter, with shares falling 24.8% since the earnings release, currently trading at $46.65.
Kratos (NASDAQ:KTOS) delivered the biggest analyst estimate beat and fastest revenue growth among its peers, reporting revenues of $458.8 million, up 30.5% year on year, topping estimates by 11.6%.
Despite those standout numbers, Kratos shares have fallen 8.1% since reporting and currently trade at $47.68, reflecting broader sector headwinds.
CACI International (NYSE:CACI), which was founded to commercialize SIMSCRIPT and now serves defense, intelligence, and IT markets, reported revenues of $2.71 billion, up 17.6% year on year.
CACI beat analyst revenue expectations by 0.7% and logged strong beats on EBITDA estimates and full-year EPS guidance, with shares climbing 23% since reporting to currently trade at $636.95.
The broader market backdrop heading into the second half of 2026 has been shaped by a rotating series of investor concerns, including questions around artificial intelligence and competitive moats that dominated late 2025 and early 2026.
By spring 2026, geopolitical risk moved to the forefront as a U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth.
Energy markets remained orderly and fears of prolonged supply disruption faded, allowing investors to shift focus back toward company fundamentals.
Defense contractors broadly continue to benefit from long-term government contracts, high barriers to entry, and sustained geopolitical demand driven by conflicts involving Russia, Ukraine, and tensions surrounding Taiwan.
