TLDR
- Lockheed Martin (LMT) stock rose 1% premarket to $557.02 after third-quarter results beat estimates.
- EPS was $7.97 versus $7.52 expected, and sales rose 11% to $20.7 billion.
- Backlog hit a record $292 billion, up from $230 billion in the second quarter.
- The company raised 2026 EPS guidance to about $30.55 at the midpoint, from $30.30.
- The stock is up 14% this year but down about 16% since the Iran War began in late February.
Lockheed Martin (LMT) stock traded up 1% in premarket trading Thursday at $557.02 after the company beat third-quarter estimates. S&P 500 and Dow futures were down 1.1% and 0.7% at the same time.
Lockheed Martin Corporation, LMT
Earnings per share came in at $7.97, above the $7.52 Wall Street expected. That is up about 15% from $6.95 a year ago.
Sales rose 11% to $20.7 billion, topping the $20.5 billion forecast. Net earnings rose 14% to $1.8 billion.
Backlog reached a record $292 billion, up 27% from $230 billion at the end of the second quarter. About $52.5 billion of that comes from the multi-year award to produce PAC-3 MSE interceptors.
Guidance Goes Up Again
Lockheed raised its 2026 outlook for the second quarter in a row. EPS is now seen at about $30.35 to $30.75, up from $29.95 to $30.65 in July.
The midpoint is about $30.55, compared with $30.30 before. Sales guidance moved to about $80 billion to $82 billion.
Free cash flow is now expected at about $7.8 billion to $8 billion, up from $7.0 billion to $7.2 billion. The company also raised its dividend for the 24th year in a row.
The new range implies fourth-quarter EPS of about $8.20. Wall Street projects $8.56, so that is a small letdown.
Even so, the outlook implies roughly 10% earnings growth from the fourth quarter of 2025 after adjusting for last year’s one-time charges. Not a bad “miss” to have.
What Drove the Quarter
Missiles and Fire Control led with sales up 24% to $4.5 billion. Production ramps on PAC-3 and THAAD added $480 million.
Aeronautics sales rose 13% to $8.2 billion. The F-35 added $710 million, and the C-130 added $270 million.
Rotary and Mission Systems sales rose 3% to $4.5 billion. Space sales rose 4% to $3.5 billion, while its operating profit stayed flat at $331 million.
Free cash flow was $3.0 billion, down from $3.3 billion a year ago. The company said higher customer receipts in the third quarter of 2025 explain the drop.
The numbers were strong, but the stock has not gotten the memo. It is up 14% this year yet down about 16% since the war began, and it trades at about 17 times forward earnings, down from 22 in March.
Investors have pointed to rising interest rates, higher inflation, potential contracting reform and the midterm election. Tesla and Meta results also failed to lift futures Thursday.
Lockheed remains in talks with the U.S. government on contracts for F-35 lot 20 and higher. Costs began to exceed the current funding on the Lot 20 advance contract in the third quarter, and the company says results will be hurt in future periods without added funding.
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