Lockheed Martin Secures Landmark $78 Billion Pentagon Deal for Up to 850 F-35 Fighter Jets

Lockheed Martin reported Q3 2026 sales of $20.71B, up 11% YoY, with a record $292B backlog. Net earnings rose 14% to $1.85B, and EPS increased from $6.95 to $7.97. Aeronautics sales grew 13%, driven by F-35 program revenue, while Missiles and Fire Control sales rose 24%. The company raised its full-year 2026 outlook, expecting sales of $80B-$82B and EPS of $30.35-$30.75.

Lockheed Martin and Avio have agreed to expand US solid rocket motor production, focusing on ER GMLRS and PrSM missiles. Avio will invest $500M in a Virginia facility to support Lockheed Martin's programs, aiming to strengthen the defense supply chain and meet growing demand.

Lockheed Martin will invest at least $7 billion in the F-35 program over 10 years, according to a finalized framework. The funds will support spare parts, modification kits, and sustainment for the global fleet. The U.S. Department of War announced the self-funded initiatives, but the total value and aircraft prices remain undisclosed. GAO reported readiness shortfalls across all F-35 variants, citing software delays and parts shortages.

Lockheed Martin (LMT) shares rose 7% after reporting a 292 billion dollar contract backlog. Q3 sales increased 11% to 20.7 billion dollars, with earnings of 1.8 billion dollars, or 7.97 dollars per share, exceeding estimates. The company also announced a 10-year F-35 production deal with the U.S. Defense Department.

The U.S. Department of Defense and Lockheed Martin agreed to a 10-year framework for at least 850 F-35s, with annual production of 156 aircraft. Lockheed will invest $7 billion in the program. The deal requires congressional approval and funding. Lockheed faces separate funding issues on F-35 Lot 20, which may impact earnings.

Lockheed Martin and the Pentagon agreed on a framework for producing 850 F-35 jets over 10 years, with 156 aircraft annually. The deal, not yet a contract, includes international orders and sustainment work. Lockheed will invest $7 billion. The framework supports 317,000 U.S. jobs and $79 billion in annual economic activity, according to the company.