Lockheed Martin third-quarter sales rise 11% to $20.7 billion and raises 2026 outlook
Net earnings rose 14% to $1.8 billion, or $7.97 per share, and the company raised its outlook for sales, earnings per share and free cash flow.
Key takeaways
- Lockheed Martin Corporation (LMT) said in a news release on Oct. 22 that third-quarter 2026 sales rose 11% to $20.7 billion and net earnings rose 14% to $1.8 billion, or $7.97 per share. The company raised its 2026 outlook for sales, earnings per share and free cash flow.
Lockheed Martin Corporation (LMT) reported third-quarter 2026 sales of $20.7 billion, up 11% from a year earlier, and net earnings of $1.8 billion, or $7.97 per share, the company said Thursday in a news release attached to a regulatory filing.
The results cover the quarter ended September 27, 2026. Net earnings rose 14% from $1.6 billion, or $6.95 per share, a year earlier.
The company also raised its 2026 outlook for sales, earnings per share and free cash flow.
Here's how the company did:
- Diluted earnings per share: $7.97 vs. $6.95 a year earlier
- Sales: $20.7 billion vs. $18.6 billion a year earlier
- Net earnings: $1.8 billion vs. $1.6 billion a year earlier
- Cash from operations: $3.4 billion vs. $3.7 billion a year earlier
- Free cash flow: $3.0 billion vs. $3.3 billion a year earlier
Free cash flow is cash from operations less capital expenditures, a non-GAAP measure, or a figure not calculated under standard accounting rules. Third-quarter capital expenditures were $439 million.
Cash from operations fell $290 million in the quarter, which the company attributed to higher customer receipts in the third quarter of 2025. Independent research and development spending was $599 million.
Backlog, or work awarded but not yet delivered, reached a record $292.0 billion. That total includes $52.5 billion associated with a multi-year award to produce PAC-3 Missile Segment Enhancement (MSE) interceptors.
For the first nine months of 2026, sales were $58.8 billion, up from $54.7 billion a year earlier. Net earnings were $5.2 billion, compared with $3.7 billion, and diluted earnings per share were $22.36, compared with $15.69.
Chairman, President and CEO Jim Taiclet said: “Our strong third quarter performance underscores Lockheed Martin’s continuing leadership in the development and delivery of advanced and reliable defense technology solutions.”
The company's 2026 outlook, in millions except per-share data, compares its current update with its July 2026 guidance.
| Metric | Current update | July 2026 |
|---|---|---|
| Sales | About $80,000 to $82,000 | $79,750 to $81,750 |
| Business segment operating profit (non-GAAP) | About $8,575 to $8,675 | $8,500 to $8,700 |
| Diluted earnings per share | About $30.35 to $30.75 | $29.95 to $30.65 |
| Cash from operations | About $10,000 to $10,200 | $9,200 to $9,400 |
| Capital expenditures | About $2,100 to $2,300 | $2,000 to $2,400 |
| Free cash flow (non-GAAP) | About $7,800 to $8,000 | $7,000 to $7,200 |
The pension adjustment in the outlook is unchanged at about $1,365 million.
Taiclet said: “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.”
Aeronautics sales rose $958 million, or 13%, to $8.2 billion. Higher F-35 sales of $710 million and C-130 sales of $270 million drove the increase, partly offset by $130 million lower F-16 sales. Segment operating profit rose 9% to $743 million from $682 million.
Missiles and Fire Control sales rose 24% to $4.5 billion. Integrated air and missile defense programs added $480 million, including PAC-3 and THAAD production ramps, and tactical and strike missile programs added $330 million, including GMLRS and PrSM. Segment operating profit rose 24% to $631 million.
Rotary and Mission Systems sales rose 3% to $4.5 billion, led by $140 million more in Sensors, Effectors and Mission Systems programs. Segment operating profit rose 4% to $524 million. A $40 million favorable profit adjustment on the resolution of a contracting matter was offset by $45 million of unfavorable adjustments on Heavy Lift and Seahawk programs.
Space sales rose 4% to $3.5 billion. Higher strategic and missile defense sales of $185 million were partly offset by $115 million lower national security space sales, which the company tied to the program lifecycle on the OPIR mission. Segment operating profit was $331 million, flat from a year earlier.
The company remains in negotiations with the U.S. Government on production contracts for F-35 lots 20 and higher. Costs on the Lot 20 advance acquisition contract began to exceed current contractual authorization and funding during the third quarter. Without additional authorization and funding, the company said its results, cash flows and financial condition will be negatively impacted in future periods.
The company delivered 43 F-35 aircraft in the quarter, compared with 46 a year earlier.
The effective tax rate was 15.1%, down from 16.5%. The company attributed the decrease to increased deductions for foreign derived deduction eligible income, partly offset by the absence of a favorable resolution of certain federal income tax audit items.
In the first nine months, the company paid $2.4 billion in dividends, compared with $2.3 billion a year earlier. It made no share repurchases in the period, after buying back $2.25 billion of stock a year earlier.
The release does not state the amount of the dividend increase.