Lockheed Martin Corp. (LMT) stock rose Thursday after the defense contractor reported better-than-expected third-quarter results, driven by sales growth across all four business segments, and raised its full-year outlook.
Lockheed Martin reported earnings of $7.97 per share, beating analysts' consensus estimate of $7.42 and rising from $6.95 a year earlier.
Revenue increased 11% year over year to $20.711 billion, exceeding the $20.495 billion consensus estimate. Net earnings climbed 14% to $1.845 billion.
Growth Across All Four Segments
Business segment operating profit rose 10% to $2.229 billion, while consolidated operating profit increased 7% to $2.443 billion.
Business segment operating margin narrowed to 10.8% from 10.9% a year earlier.
Aeronautics revenue climbed 13% to $8.214 billion, driven by higher F-35 production and sustainment activity and C-130 pre-contract cost recovery.
The segment's operating profit rose 9% to $743 million, although its operating margin narrowed to 9% from 9.4%.
Lockheed Martin delivered 43 F-35 fighter jets during the quarter, down from 46 a year earlier.
Missiles and Fire Control posted the strongest segment growth, with revenue and operating profit both increasing 24% to $4.501 billion and $631 million, respectively.
Higher production of PAC-3, THAAD, GMLRS and Precision Strike Missiles fueled the increase.
Rotary and Mission Systems revenue rose 3% to $4.511 billion, while Space revenue increased 4% to $3.485 billion.
A Record $292 Billion Backlog Signals Strong Demand
Lockheed Martin's order backlog reached a record $292 billion, including $52.5 billion tied to a multiyear PAC-3 MSE interceptor contract.
The company reported a book-to-bill ratio of 4, indicating that new orders significantly exceeded quarterly sales.
Operating cash flow totaled $3.438 billion, while free cash flow reached $2.999 billion.
Lockheed Martin ended the quarter with $5.960 billion in cash and equivalents and $20.498 billion in long-term debt.
Raising 2026 Earnings And Revenue Forecasts
Lockheed Martin raised its full-year earnings forecast to $30.35-$30.75 per share from $29.95-$30.65, compared with analysts' consensus estimate of $30.41.
The company increased its revenue outlook to $80 billion-$82 billion from $79.75 billion-$81.75 billion, compared with the $80.963 billion consensus estimate.
Lockheed Martin also raised its free cash flow forecast to $7.8 billion-$8 billion.
However, the company warned that costs associated with F-35 Lot 20 have exceeded existing contractual authorization and funding.
Lockheed said insufficient additional U.S. government funding could affect its future operating results, cash flows and financial condition.
CEO Jim Taiclet highlighted the company's efforts to combine established defense systems, including the F-35, Aegis and Hellfire, with emerging technologies such as artificial intelligence and autonomous systems.
Taiclet said Lockheed Martin is working with startups, new industry entrants and commercial technology companies to accelerate innovation and improve military capabilities.
New F-35 Framework Covers 850 Fighter Jets Over 10 Years
Separately, Lockheed Martin and the U.S. Department of Defense announced a framework agreement covering 850 U.S. F-35 fighter jets over 10 years.
The framework also includes spare parts, modification kits, sustainment services and international orders across production Lots 21 through 30.
The agreement targets annual production of 156 aircraft, potentially providing greater visibility into long-term manufacturing demand and investment requirements.
However, final pricing, production schedules and contract awards remain subject to congressional authorization, funding appropriations and final negotiations.
"This multiyear framework strengthens the way we can plan and invest in the F-35 enterprise," Taiclet said.
LMT Price Action: Lockheed Martin shares rose 3.63% to $571.55 in premarket trading Thursday, according to market data.
