Lockheed Martin Reports Third Quarter 2026 Financial Results
LOCKHEED MARTIN CORP (LMT) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 News Release Lockheed Martin Reports Third Quarter 2026 Financial Results • Sales increased 11% to $20.7 billion • Net earnings increased 14% to $1.8 billion, or $7.97 per share • Cash from operations of $3.4 billion and free cash flow of $3.0 billion • Record backlo
How this was made
The 30-second read
Why it matters
The earnings beat and raised guidance are likely to attract buying, especially given the record backlog and defense spending environment.
Market read
Strong earnings and raised outlook position LMT for near‑term upside and may lift the broader defense sector.
What to watch
Potential funding shortfalls for the F‑35 lot 20 contract could pressure future cash flows.
Lockheed Martin Reports Third Quarter 2026 Financial Results
Third-quarter sales, net earnings and diluted earnings per share increased 11%, 14% and $1.02, respectively, all four segments grew sales, backlog reached a record $292.0 billion, and the company increased its 2026 outlook for sales, diluted earnings per share and free cash flow.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Sales, third quarter 2026GAAP | $20.71B | – | 11% |
| Sales, nine months ended Sept. 27, 2026GAAP | $58.80B | – | 7% |
| Operating costs and expenses, third quarter 2026GAAP | −$18.27B | – | – |
| Operating costs and expenses, nine months ended Sept. 27, 2026GAAP | −$51.84B | – | – |
| Gross profit, third quarter 2026GAAP | $2.44B | – | – |
| Gross profit, nine months ended Sept. 27, 2026GAAP | $6.96B | – | – |
| Consolidated operating profit, third quarter 2026GAAP | $2.44B | – | 7% |
| Consolidated operating profit, nine months ended Sept. 27, 2026GAAP | $6.99B | – | 29% |
| Total consolidated operating margin, third quarter 2026GAAP | 11.8 % | – | – |
| Total consolidated operating margin, nine months ended Sept. 27, 2026GAAP | 11.9 % | – | – |
| Business segment operating profit, third quarter 2026non-GAAP | $2.23B | – | 10% |
| Business segment operating profit, nine months ended Sept. 27, 2026non-GAAP | $6.21B | – | 33% |
| Total business segment operating margin, third quarter 2026non-GAAP | 10.8 % | – | – |
| Total business segment operating margin, nine months ended Sept. 27, 2026non-GAAP | 10.6 % | – | – |
| Net earnings, third quarter 2026GAAP | $1.84B | – | 14% |
| Net earnings, nine months ended Sept. 27, 2026GAAP | $5.17B | – | – |
| Diluted earnings per share, third quarter 2026GAAP | $ 7.97 | – | $1.02 |
| Diluted earnings per share, nine months ended Sept. 27, 2026GAAP | $ 22.36 | – | – |
| Basic earnings per share, third quarter 2026GAAP | $ 8.00 | – | – |
| Basic earnings per share, nine months ended Sept. 27, 2026GAAP | $ 22.45 | – | – |
| Effective tax rate, third quarter 2026GAAP | 15.1% | – | – |
| Effective tax rate, nine months ended Sept. 27, 2026GAAP | 15.6 % | – | – |
| Cash from operations, third quarter 2026GAAP | $3.44B | – | $290 million decrease |
| Cash from operations, nine months ended Sept. 27, 2026GAAP | $6.89B | – | – |
| Capital expenditures, third quarter 2026GAAP | −$439M | – | – |
| Capital expenditures, nine months ended Sept. 27, 2026GAAP | −$1.27B | – | – |
| Free cash flow, third quarter 2026non-GAAP | $3.00B | – | $348 million decrease |
| Free cash flow, nine months ended Sept. 27, 2026non-GAAP | $5.63B | – | – |
| Total backlog, Sept. 27, 2026other | $292.0B | 27% | – |
| F-35 aircraft deliveries, third quarter 2026other | 43 | – | – |
| F-16 aircraft deliveries, third quarter 2026other | 4 | – | – |
| C-130J aircraft deliveries, third quarter 2026other | 2 | – | – |
| Government helicopter program deliveries, third quarter 2026other | 16 | – | – |
| Commercial helicopter program deliveries, third quarter 2026other | — | – | – |
| International military helicopter program deliveries, third quarter 2026other | 7 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AeronauticsHigher sales of $710 million on the F-35 program from higher volume on production and sustainment contracts and $270 million on the C-130 program due to liquidation of pre-contract costs, partially offset by lower sales of $130 million on the F-16 program. | $8.21B | – | 13% |
| Missiles and Fire ControlHigher sales of $480 million on integrated air and missile defense programs and $330 million on tactical and strike missile programs, both due to production ramps. | $4.50B | – | 24% |
| Rotary and Mission SystemsHigher sales of $140 million on Sensors, Effectors & Mission Systems programs due to higher volume on radar programs. | $4.51B | – | 3% |
| SpaceHigher sales of $185 million on strategic and missile defense programs due to higher volume on Fleet Ballistic Missile and Next Generation Interceptor programs, partially offset by lower sales of $115 million for national security space programs due to the program lifecycle on the OPIR mission. | $3.48B | – | 4% |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
2026 Financial Outlook outlook
- Revenue~$80,000 - $82,000 million
- NoteBusiness segment operating profit: ~$8,575 - $8,675 million
- NoteTotal FAS/CAS pension adjustment: ~$1,365 million
- NoteDiluted earnings per share: ~$30.35 - $30.75
- NoteCash from operations: ~$10,000 - $10,200 million
- NoteCapital expenditures: ~$2,100 - $2,300 million
- NoteFree cash flow: ~$7,800 - $8,000 million
- NoteConsolidated operating profit: ~$9,520 - $9,620 million
Capital returns
- Dividends paid, nine months ended Sept. 27, 2026: $ (2,408) million
- Repurchases of common stock, nine months ended Sept. 27, 2026: —
- The company increased its dividend for the 24th year in a row.
What drove it
- Third-quarter sales increased $2.1 billion, or 11%, driven by growth in each of the four business segments.
- Business segment operating profit increased $200 million due to munition ramps at Missiles and Fire Control and higher volume at Aeronautics.
- Net earnings increased $226 million and diluted earnings per share increased $1.02 primarily due to higher consolidated operating profit of $163 million.
- Backlog reached $292.0 billion, including $52.5 billion associated with the multi-year award to produce PAC-3 Missile Segment Enhancement interceptors.
- The effective income tax rate decreased primarily due to increased tax deductions for foreign derived deduction eligible income (FDDEI), partially offset by the absence of the favorable resolution of certain federal income tax audit items as compared to the prior year.
Concerns
- The company remains in negotiations with the U.S. Government on production contracts for F-35 lots 20 and higher.
- Costs incurred began to exceed current contractual authorization and funding on the Lot 20 advance acquisition contract during the third quarter of 2026.
- Without additional contractual authorization and funding from the U.S. Government, results of operations, cash flows, and financial condition will be negatively impacted in future periods.
- Third-quarter cash from operations and free cash flow decreased primarily due to higher customer receipts in the third quarter of 2025.
- Aeronautics operating profit was partially offset by higher unfavorable profit adjustments of $40 million on the F-16 program and $40 million on the C-130 program.
- Rotary and Mission Systems operating profit included unfavorable profit adjustments of $45 million on Heavy Lift and Seahawk programs.
What to watch
- Additional contractual authorization and funding for the F-35 Lot 20 advance acquisition contract and progress on F-35 lots 20 and higher negotiations.
- Execution of production ramps for PAC-3, THAAD, GMLRS and PrSM programs.
- Conversion and execution of the record $291,984 million backlog.
- Cash from operations and free cash flow delivery against the updated 2026 outlook.
- Aeronautics profit adjustments on the F-16 and C-130 programs and Rotary and Mission Systems profit adjustments on Heavy Lift and Seahawk programs.
Balance sheet and cash flow
- Cash and cash equivalents at Sept. 27, 2026: $ 5,960 million; Dec. 31, 2025: $ 4,121 million
- Long-term debt, net at Sept. 27, 2026: $ 20,498 million; Dec. 31, 2025: $ 20,532 million
- Current maturities of long-term debt at Sept. 27, 2026: —; Dec. 31, 2025: $ 1,168 million
- Total assets at Sept. 27, 2026: $ 64,510 million; Dec. 31, 2025: $ 59,840 million
- Contract assets at Sept. 27, 2026: $ 16,899 million; Dec. 31, 2025: $ 13,001 million
- Contract liabilities at Sept. 27, 2026: $ 12,644 million; Dec. 31, 2025: $ 11,440 million
- Net cash provided by operating activities, nine months ended Sept. 27, 2026: $ 6,893 million; Sept. 28, 2025: $ 5,338 million
- Net cash used for investing activities, nine months ended Sept. 27, 2026: $ (1,360) million; Sept. 28, 2025: $ (1,464) million
- Net cash used for financing activities, nine months ended Sept. 27, 2026: $ (3,694) million; Sept. 28, 2025: $ (2,887) million
Analysis
Lockheed Martin reported broad third-quarter growth, with sales of $ 20,711 million, up 11%, and all four business segments posting year-over-year sales increases. Missiles and Fire Control was the largest growth contributor on a percentage basis, with sales up 24% on integrated air and missile defense and tactical and strike missile production ramps. Aeronautics sales increased 13%, led by F-35 production and sustainment volume and C-130 pre-contract-cost liquidation.
Profit growth trailed revenue growth at the consolidated operating level. Consolidated operating profit rose 7% to $ 2,443 million and total consolidated operating margin was 11.8 %, compared with 12.3 % in the prior-year quarter. Business segment operating profit increased 10% to $ 2,229 million. Aeronautics margin declined to 9.0 % from 9.4 %, Missiles and Fire Control margin declined to 14.0 % from 14.1 %, and Space margin declined to 9.5 % from 9.9 %, while Rotary and Mission Systems margin was unchanged at 11.6 %.
Net earnings increased 14% to $ 1,845 million and diluted earnings per share increased to $ 7.97 from $ 6.95, primarily due to higher consolidated operating profit. The effective tax rate declined to 15.1% from 16.5%, primarily reflecting increased FDDEI deductions. Cash conversion was softer year over year: cash from operations declined to $ 3,438 million from $ 3,728 million and free cash flow declined to $ 2,999 million from $ 3,347 million, primarily due to higher customer receipts in the third quarter of 2025.
The company raised its 2026 outlook for sales to ~$80,000 - $82,000 million, diluted earnings per share to ~$30.35 - $30.75, cash from operations to ~$10,000 - $10,200 million, and free cash flow to ~$7,800 - $8,000 million. Backlog grew 27% since the second quarter of 2026 to $ 291,984 million, supported by a $52.5 billion multi-year PAC-3 MSE interceptor award. The principal execution issue disclosed is the F-35 Lot 20 advance acquisition contract, where costs incurred began to exceed existing contractual authorization and funding during the quarter; the company stated that absent additional authorization and funding, future results, cash flows and financial condition will be negatively impacted.
Management, verbatim
In the third quarter each of our four segments posted growth year-over-year, sales topped $20.7 billion and net earnings exceeded $1.8 billion, increases of 11% and 14% respectively. We delivered $3 billion of free cash flow in the quarter, and increased our backlog to a record $292 billion, allowing us to raise our dividend for the 24 th year in a row. The sustained financial momentum across our portfolio gives us confidence to increase our outlook for sales, earnings per share and free cash flow, the second consecutive quarter we have raised our financial guidance.
Jim Taiclet, Chairman, President and CEO
Not in the filing
stated, not guessed- Non-GAAP earnings per share were not reported.
- Gross margin was not reported.
- Quarterly dividend payment and quarterly common-stock repurchases were not reported.
- Prior-year cash and debt balances were not reported.
- Prior-quarter values for reported operating metrics were not reported.
- 2026 guidance for gross margin, operating expenses and tax rate was not reported.
- A separate previous earnings release outlook was not provided; therefore, no actual-versus-prior-guidance comparison is included.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Lockheed Martin filed a Form 8‑K reporting its third‑quarter 2026 financial results and updated outlook.
Ticker impact
Lockheed Martin reported Q3 2026 results with 11% sales growth, 14% earnings increase and raised guidance for sales, EPS and free cash flow.
likely upward pressure as the market prices in the raised guidance
The company posted higher-than-expected sales and earnings, set a record $292B backlog and explicitly raised its outlook, which typically drives buying interest.
Market effects
Defense sector may see broader rally on strong backlog and guidance from a leading contractor.
U.S. defense stocks could benefit as investors rotate into high‑margin aerospace and missile makers.
International defense suppliers may see indirect demand lift from Lockheed's expanded contracts.
Counterpoint
If the backlog growth slows or government funding stalls, the rally could be premature.
Key entities
- CompanyLockheed Martin
U.S. defense contractor reporting Q3 2026 results.
