Lockheed Martin beat expectations on October 22. Revenue rose 11% to $20.7 billion in the third quarter of 2026, the backlog hit a record $292 billion, and full-year guidance went up for a second quarter in a row. Missile demand was surging, and a new long-term F-35 framework with the Pentagon added to the story.

Diluted earnings per share came in at $7.97, up from $6.95 a year earlier and ahead of the $7.52 FactSet consensus. Net earnings rose 14% to $1.85 billion, from $1.62 billion. Free cash flow hit $3.0 billion. Shares climbed about 4% in premarket trading.

Record backlog and raised guidance

The backlog jumped 27% from the second quarter to a record $292 billion, $113 billion higher than the third quarter of 2025, with a book-to-bill ratio of 4.0x. Inside that total sits $52.5 billion tied to a multi-year award to produce PAC-3 Missile Segment Enhancement interceptors.

The company lifted its full-year 2026 outlook for the second straight quarter:

• Sales: $80–82 billion (from $79.75–81.75 billion previously)
• Diluted earnings per share: $30.35–30.75 (from $29.95–30.65)
• Free cash flow: $7.8–8.0 billion (from $7.0–7.2 billion)
• Business segment operating profit: $8.575–8.675 billion

All four business segments — aeronautics, missiles and fire control, space, and rotary and mission systems — posted year-over-year sales growth.

Missiles and F-35s drive the beat

Missiles and Fire Control carried the quarter. Sales and profit each rose 24%, as munitions output ran ahead of schedule on higher PAC-3 and THAAD production. Aeronautics revenue jumped 13%, helped by increased F-35 production.

Separately on Thursday, Lockheed announced a 10-year framework agreement with Pentagon leadership covering 850 F-35 Lightning II aircraft for the U.S. military, plus hundreds more for international customers, spare parts, and maintenance support. That deal locks in the plan to build 156 jets annually in the coming years — the longest commitment in recent efforts to put the defense industrial base on a wartime footing, according to Dow Jones Newswires via Morningstar.

“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,” said Chairman, President and CEO Jim Taiclet.

Chief Executive Taiclet said the results came from pulling existing platforms through with new digital technology and innovation, and the company sees a path to high-single-digit revenue growth in 2027 across all four segments. Formal 2027 guidance still comes in January.

Context: a mixed defense and earnings landscape

Lockheed’s beat landed on a choppy day for markets, with the Nasdaq pressed by worries about AI investment financing, even as defense names outperformed. Munitions strength — PAC-3, THAAD — mirrors the same global demand lifting other defense primes this earnings season. Analysts noted that a record backlog plus a formal multi-decade F-35 production commitment gives Lockheed rare revenue visibility for a contractor, with the 850-aircraft framework effectively backing the aeronautics segment’s output well into the 2030s.

For The Nerdy Humourist’s coverage of another major Q3 2026 earnings story, see SpaceX’s third-quarter results, where revenue beat on an AI and Starlink surge.

A note on the numbers

One number going around — a claim that a seven-year PAC-3 contract could be worth up to $58.6 billion in total — comes from TradingKey, a less-established outlet, and is not confirmed in the company’s headline release. The $52.5 billion PAC-3 MSE award figure appears consistently across Morningstar/Dow Jones Newswires and Ticker Report coverage of the company’s release, and it is the figure used in this article’s backlog breakdown.

Frequently asked questions

Q: What did Lockheed Martin report for Q3 2026?

A: Sales of $20.71 billion, up 11% year over year and ahead of analyst estimates; diluted EPS of $7.97 against $6.95 a year ago, beating the $7.52 consensus; net earnings of $1.8–1.85 billion and free cash flow of $3.0 billion.

Q: How big is Lockheed Martin’s backlog now?

A: A record $292 billion, up 27% from the second quarter and $113 billion from Q3 2025, including a $52.5 billion multi-year PAC-3 Missile Segment Enhancement interceptor award.

Q: What is the new F-35 framework agreement?

A: A 10-year framework with Pentagon leadership covering 850 F-35 Lightning II aircraft for the U.S. military plus hundreds more for international customers, spare parts, and maintenance — locking in production of 156 jets per year.

Q: Did Lockheed raise its 2026 guidance?

A: Yes — for the second consecutive quarter. Sales guidance rose to $80–82 billion, EPS to $30.35–30.75, and free cash flow to $7.8–8.0 billion.