Lockheed Martin Sales Rise 11% to $20.711 Billion as Earnings Beat Estimates and Backlog Hits a Record $291.984 Billion

Lockheed Martin reported third-quarter 2026 results on Thursday, Oct. 22, with sales up 11% year over year to $20.711 billion, net earnings up 14% to $1.845 billion and diluted earnings per share of $7.97, above the $7.52 Wall Street was looking for.

The quarter cleared the consensus yardstick on both headline lines. Diluted earnings per share of $7.97 beat the $7.52 expectation by $0.45, and sales of $20.711 billion came in above the $20.5 billion expectation, both differences on TickerGrove's calculation from the reported and expected figures. The growth was broad rather than concentrated in one program: each of the company's four business segments posted higher sales than a year earlier, and the order book, not just the quarter, set the record that frames the report.

A $52.5 billion missile award remade the backlog

Total backlog was $291.984 billion as of Sept. 27, 2026. Backlog is a point-in-time stock of orders at the quarter's end, not revenue earned in the quarter, and the company said it grew 27% since the second quarter of 2026; reporting on Thursday put the second-quarter figure at $230 billion. The release highlights $52.5 billion associated with the multi-year award to produce PAC-3 Missile Segment Enhancement interceptors inside that total, and its segment table lists Missiles and Fire Control backlog at $142.517 billion at Sept. 27. Chairman, President and Chief Executive Jim Taiclet tied the quarter together in the release: "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 24th year in a row." The release states the dividend increase for a 24th consecutive year without stating a new per-share amount in the results text, so this article does not state one.

Missiles led, and every segment grew

Aeronautics remained the largest segment, with sales of $8.214 billion, up 13%, helped by $710 million of higher sales on the F-35 program and $270 million on the C-130 program, partly offset by $130 million of lower F-16 sales. Missiles and Fire Control grew fastest, with sales of $4.501 billion, up 24%, on higher sales of $480 million on integrated air and missile defense programs from production ramps for PAC-3 and THAAD, and $330 million on tactical and strike missile programs from ramps for GMLRS and PrSM. Rotary and Mission Systems sales were $4.511 billion, up 3%, and Space sales were $3.485 billion, up 4%. Total business segment operating profit was $2.229 billion; the company identifies segment operating profit and free cash flow as non-GAAP measures, supplemental to the reported results above.

Cash flow was lower than a year earlier

Cash from operations was $3.438 billion, down from $3.728 billion in the third quarter of 2025, and free cash flow was $2.999 billion, down from $3.347 billion. The company said the decreases were primarily due to the higher customer receipts in the third quarter of 2025. Capital expenditures in the quarter were $439 million. The cash lines are the one part of the print that moved backward year over year, and they sit against a backlog whose conversion into deliveries and receipts is the test of the quarters ahead.

The outlook rose, with the F-35 funding talks as the open item

The updated 2026 outlook in the release puts sales at about $80.0 billion to $82.0 billion, up from the July outlook of $79.75 billion to $81.75 billion, and diluted earnings per share at about $30.35 to $30.75, up from $29.95 to $30.65. Cash from operations guidance rose to about $10.0 billion to $10.2 billion from $9.2 billion to $9.4 billion, and free cash flow guidance rose to about $7.8 billion to $8.0 billion from $7.0 billion to $7.2 billion. Those are forward-looking company expectations, not results. Reporting on Thursday calculated that the new earnings-per-share midpoint of about $30.55, against a prior midpoint of about $30.30, implies fourth-quarter earnings per share of about $8.20 against a Wall Street projection of $8.56. The open item is contractual, not demand: the company remains in negotiations with the U.S. Government on the production contracts for F-35 lots 20 and higher, its costs began to exceed the current contractual authorization and funding during the third quarter, and it warned that without additional authorization and funding its results of operations, cash flows and financial condition will be negatively impacted in future periods. Shares were up 1% in premarket trading on Thursday at $557.02, while S&P 500 and Dow Jones Industrial Average futures were down 1.1% and 0.7%, respectively; the stock had declined about 16% since late February coming into the report. What to watch next is whether the F-35 authorization lands, whether the enlarged Missiles and Fire Control backlog converts into sales and cash at the pace the raised outlook assumes, and whether fourth-quarter earnings clear the implied $8.20 mark.