It's earnings season, and if you're watching the markets this week, you might want to keep an eye on the defense sector. Why? Because five of the biggest names in military contracting are stepping up to report their quarterly numbers, and they're doing it against a backdrop of global tension and big government budget talks. It's a classic Wall Street story: can the companies that build the planes, missiles, and tech for modern warfare keep delivering the goods that investors have come to expect?
Defense stocks have had quite a run in 2026. Thanks to increased friction in the Middle East and proposals for higher U.S. military spending, some of these giants have hit all-time highs. But now comes the quarterly reality check. Here's who's reporting and when:
These aren't just random picks; together, they make up a hefty chunk of the defense ETF world. In the iShares US Aerospace & Defense ETF (ITA), they account for a combined 53% of assets under management. GE is the top dog at 19.22%, followed by RTX at 15.88%, Boeing at 9.43%, Lockheed Martin at 4.23%, and Northrop Grumman at 4.20%. So, when these companies talk, the whole sector listens.
What Wall Street Is Watching: Guidance Over Gossip
With earnings reports landing amid ongoing Middle East drama and U.S. defense budget debates, the real story might not be the past quarter's numbers but what management says about the future. Jay Woods, Chief Market Strategist at Freedom Capital Markets, put it bluntly in a recent note: "Defense stocks have been one of the market's best stories over the last year. There has been strong demand, locked-in contracts, and clearly some political tailwinds."
But, he adds, the bar is high now. "Watch the guidance, especially when tied to Pentagon budgets. Any government slowdown could impact that projection. Also keep an eye on execution and backlog conversion." In other words, it's not enough to have contracts; you've got to turn them into cash and keep the pipeline full.
Woods also pointed out a technical red flag: the iShares US Aerospace & Defense ETF recently failed to hold its 50-day moving average. That could mean the defense trade is losing steam. "The defense stocks may surprise to the downside given all the hype we have seen thanks to the war," he said. "The risk seems to favor the bears. The sector companies may need a fantastic guide and assurance from the Pentagon that spending on the war will continue to get back to those 52-week highs." So, investors are looking for more than just good numbers—they want confidence that the good times will roll on.
The Earnings Scorecard: Who's Been Crushing It?
If history is any guide, some of these companies come into this week with impressive track records, while others have been a bit more hit-or-miss. Here's a quick rundown of recent trends, based on market data:
- RTX: This one's a consistent winner. It has beaten earnings per share estimates for over 20 straight quarters and revenue estimates for 12 straight quarters. That's the kind of streak that makes analysts nod approvingly.
- GE Aerospace: Also on a hot streak, with earnings per share beats in 16 straight quarters. Revenue missed last quarter, but it's beaten estimates in nine of the last 10 quarters. Not too shabby.
- Northrop Grumman: More of a mixed bag. It's beaten earnings per share in three straight quarters and nine of the last 10 overall, but revenue has been less consistent, beating estimates in the most recent quarter and six of the last 10.
- Boeing: Here's where it gets tricky. Boeing has missed earnings per share estimates in two straight quarters and five of the last 10 overall. On the bright side, revenue has beaten estimates in four straight quarters and seven of the last 10. So, it's a tale of two metrics.
- Lockheed Martin: Similar to Boeing, with a recent miss on earnings per share last quarter, but beats in nine of the last 10 overall. Revenue has been stronger, beating estimates in four straight quarters and nine of the last 10.
Bottom line: RTX and GE are the steady eddies with long winning streaks, while Boeing, Lockheed Martin, and Northrop Grumman have shown they can deliver but with more variability. As earnings roll out this week, investors will be watching to see if the strong keep getting stronger, or if the mixed performers can step up their game in a sector that's riding high on geopolitical winds.
