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# Lockheed Martin Q3 2026 results: record $292bn backlog
- URL: https://bullquill.com/lockheed-martin-q3-2026-results-record-backlog/
- Published: 2026-10-23T07:16:03.000Z
- Updated: 2026-10-23T08:29:33.000Z
- Description: Missiles and Fire Control sales and operating profit both rose 24% as PAC-3, THAAD, GMLRS and PrSM production ramped up. Free cash flow fell to $2,999 million, but the 2026 outlook was raised to about $7.8–8.0 billion.
- Author: Rowan Ashby
- Tags: Finance, Trending, Lockheed Martin, PAC-3, Pentagon, Defense Stocks, F-35, #lang-en, #tr-lockheed-martin-q3-2026-results-record-backlog

## Key takeaways

- Lockheed Martin Q3 2026 results: net sales rose 11% to $20,711 million, and net earnings rose 14% to $1,845 million, or $7.97 per diluted share (Q3 2025: $6.95).
- Backlog reached a record $291,984 million at 27 September 2026, up 27% from the end of the second quarter. The company says $52.5 billion of it relates to the multi-year PAC-3 MSE production award.
- Missiles and Fire Control was the fastest-growing segment: sales and operating profit both rose 24% as PAC-3, THAAD, GMLRS and PrSM production ramped up.
- Free cash flow fell to $2,999 million from $3,347 million. The company attributed the drop mainly to higher customer receipts in the year-earlier quarter.
- The 2026 free cash flow outlook was raised to about $7.8–8.0 billion (July: $7.0–7.2 billion), and the EPS outlook to about $30.35–30.75.
- LMT shares closed up 6.96% at $589.91 on 22 October (data as of 20:00 UTC, NYSE close).

Lockheed Martin Q3 2026 results showed sales of $20.7 billion, up 11% from a year earlier, and a record $292.0 billion backlog lifted by a PAC-3 MSE interceptor award. The company, reporting on 22 October, raised its 2026 outlook for a second straight quarter.

## Lockheed Martin Q3 2026 results at a glance

All figures below come from the earnings release Lockheed Martin filed with the U.S. Securities and Exchange Commission as Exhibit 99.1 to a Form 8-K. The third quarter ended on 27 September 2026.

| Metric ($ millions, except EPS)   | Q3 2026 | Q3 2025 | Change |
| --------------------------------- | ------- | ------- | ------ |
| Net sales                         | 20,711  | 18,609  | +11%   |
| Business segment operating profit | 2,229   | 2,029   | +10%   |
| Consolidated operating profit     | 2,443   | 2,280   | +7%    |
| Net earnings                      | 1,845   | 1,619   | +14%   |
| Diluted EPS                       | $7.97   | $6.95   | +$1.02 |
| Cash from operations              | 3,438   | 3,728   | −290   |
| Free cash flow                    | 2,999   | 3,347   | −348   |

Source: Lockheed Martin Q3 2026 earnings release (SEC Form 8-K, Exhibit 99.1), 22 October 2026.

The quarter beat expectations. The Motley Fool reported that Wall Street had forecast third-quarter earnings of $7.52 per share. For the first nine months of 2026, sales totalled $58,795 million and diluted EPS was $22.36.

Chief executive Jim Taiclet said in the release that the "strong third quarter performance underscores Lockheed Martin's continuing leadership" in defence technology.

## Why the backlog hit a record $292 billion

Backlog is the value of contracted work not yet recognised as sales. Lockheed Martin's backlog stood at $193.6 billion at the end of 2025 and reached $292.0 billion by 27 September 2026, with a 27% jump in the third quarter alone.

The biggest single contributor was the Patriot Advanced Capability-3 Missile Segment Enhancement (PAC-3 MSE) interceptor. On 29 July 2026, Lockheed Martin announced a seven-year contract modification from the U.S. Department of War worth up to $53.86 billion. It was issued as an undefinitized contract action, meaning the final terms were still being negotiated. Together with a $4.7 billion first-year action in April, the company put the total multi-year value at $58.62 billion. It said the funding supports tripling PAC-3 MSE production capacity by the end of 2030\. The Q3 release says $52.5 billion of the current backlog is associated with this award.

On the earnings call, as summarised by GuruFocus, Taiclet also pointed to supplier contracts tied to the ramp. He cited a $14.7 billion Boeing contract to triple PAC-3 seeker production and a $4.7 billion L3Harris propulsion contract.

## Segment performance: missiles lead, F-35 still the largest driver

| Segment ($ millions)       | Sales Q3 2026 | Sales Q3 2025 | Change | Op. profit Q3 2026 | Op. profit Q3 2025 | Margin Q3 2026 |
| -------------------------- | ------------- | ------------- | ------ | ------------------ | ------------------ | -------------- |
| Aeronautics                | 8,214         | 7,256         | +13%   | 743                | 682                | 9.0%           |
| Missiles and Fire Control  | 4,501         | 3,624         | +24%   | 631                | 510                | 14.0%          |
| Rotary and Mission Systems | 4,511         | 4,373         | +3%    | 524                | 506                | 11.6%          |
| Space                      | 3,485         | 3,356         | +4%    | 331                | 331                | 9.5%           |

Source: Lockheed Martin Q3 2026 earnings release (SEC Form 8-K, Exhibit 99.1).

### Aeronautics

Aeronautics sales rose by $958 million. F-35 sales were $710 million higher on increased production and sustainment volume. C-130 sales added $270 million as the company recognised pre-contract costs ahead of an expected contract award. F-16 sales fell by $130 million. Operating profit rose 9%, but $40 million of unfavourable profit adjustments on each of the F-16 and C-130 programmes pulled the margin down to 9.0% from 9.4%.

### Missiles and Fire Control

Missiles and Fire Control grew fastest. Integrated air and missile defence sales rose by $480 million as PAC-3 and THAAD production ramped up. Tactical and strike missiles added $330 million, led by GMLRS and PrSM. Operating profit rose $121 million to $631 million on that higher volume.

### Rotary and Mission Systems and Space

Rotary and Mission Systems grew 3%, helped by $140 million more radar volume on sensor and mission systems programmes. A $40 million favourable item was more than offset by $45 million of unfavourable adjustments on the Heavy Lift and Seahawk helicopter programmes. Space sales rose 4%, as strategic and missile defence work (FBM and NGI) offset lower national security space sales tied to the lifecycle of the OPIR satellite programme. Space operating profit was flat.

## Free cash flow and the raised 2026 outlook

Quarterly free cash flow fell 10% year on year to about $3.0 billion. Lockheed Martin attributed the decline mainly to higher customer receipts a year earlier, not to weaker operations. Capital expenditure in the quarter was $439 million. The company made no share repurchases in the first nine months of 2026, compared with $2,250 million in the same period of 2025\. It paid $2,408 million in dividends over the nine months.

| 2026 outlook                      | October 2026     | July 2026      |
| --------------------------------- | ---------------- | -------------- |
| Net sales                         | \~$80.0–82.0bn   | $79.75–81.75bn |
| Business segment operating profit | \~$8.575–8.675bn | $8.5–8.7bn     |
| Diluted EPS                       | \~$30.35–30.75   | $29.95–30.65   |
| Cash from operations              | \~$10.0–10.2bn   | $9.2–9.4bn     |
| Free cash flow                    | \~$7.8–8.0bn     | $7.0–7.2bn     |

Source: Lockheed Martin Q3 2026 earnings release (SEC Form 8-K, Exhibit 99.1).

The release did not itemise the reasons for the raise beyond citing momentum across the portfolio. The biggest change is cash: the midpoint of the free cash flow range moved up by $800 million. Separately, on 9 October the board declared a fourth-quarter dividend of $3.60 per share, up $0.15\. The dividend is payable on 31 December 2026 to holders of record on 1 December, and the company described it as the 24th consecutive annual increase.

## F-35 funding: the open question

The release also contains a caution. Lockheed Martin is still negotiating F-35 production contracts for Lot 20 and later lots. It said costs on the Lot 20 advance acquisition contract began exceeding current authorisation and funding during the quarter, and that its results, cash flows and financial condition could be hurt in future periods without additional U.S. government funding.

According to the GuruFocus call summary, chief financial officer Evan Scott said a Lot 20 signing is not included in guidance. He also said Aeronautics guidance was trimmed slightly because revised award timing shifts some F-35 sales into 2027\. Taiclet referred on the call to a 10-year F-35 framework with the Department of War. 24/7 Wall St. reported that the framework covers 850 aircraft and is "not yet a finalized contract." Lockheed Martin did not include it in the Q3 figures.

## How the shares reacted

Investors welcomed the results. LMT closed at $589.91 on the New York Stock Exchange on 22 October, up $38.40 or 6.96% from $551.51 the previous day. It traded as high as $608.00 during the session, according to The Motley Fool and StockAnalysis daily price history (data as of 20:00 UTC, 22 October 2026). 24/7 Wall St. reported that RTX and Northrop Grumman also rose during the session. Even after the move, the shares remained below the 52-week high of $692.00 cited by The Motley Fool. Schaeffer's Investment Research noted that 13 of the 24 brokerages covering the stock rated it "hold" or worse before the report.

For context on how other large companies fared this earnings season, see our coverage of [Valero's Q3 2026 results](https://bullquill.com/valero-q3-2026-results-refining-margins/), [IBM's Q3 2026 results](https://bullquill.com/ibm-q3-2026-results-software-ai/) and [Tesla's Q3 2026 capex cut](https://bullquill.com/tesla-q3-2026-results-capex-cut/). For the aerospace side, see [what the FAA's 737 MAX 10 certification means for Boeing](https://bullquill.com/faa-certifies-boeing-737-max-10-what-it-means/).

## What it means

The quarter shows the Pentagon's push to rebuild munitions stocks turning into contracted revenue. Missile defence is now Lockheed Martin's fastest-growing business, and the PAC-3 award alone accounts for about 18% of the record backlog. A backlog that size gives the company years of visibility. Whether that turns into profit depends on execution: the production ramp needs factory space, hiring and suppliers delivering on time. On the call, executives named supply chain performance as a continuing challenge, according to GuruFocus.

Three risks remain. F-35 funding for Lot 20 is unresolved and is already flagged in the release. Margins slipped slightly in Aeronautics and Space as profit adjustments weighed. And the PAC-3 award is still undefinitized, so final pricing and terms could change. Scott declined to give 2027 guidance until January but said all four segments are expected to grow, according to the call summary.

## Frequently asked questions

### What were Lockheed Martin's Q3 2026 results?

Lockheed Martin reported third-quarter 2026 net sales of $20.7 billion, up 11% from $18.6 billion a year earlier, net earnings of $1.85 billion and diluted earnings per share of $7.97, compared with $6.95 in Q3 2025\. Free cash flow was about $3.0 billion.

### Why is Lockheed Martin's backlog a record $292 billion?

Backlog rose 27% in the third quarter to $292.0 billion. The company says $52.5 billion of it relates to a seven-year, multi-year award to produce PAC-3 MSE interceptors, which Lockheed Martin values at up to $58.62 billion in total.

### Did Lockheed Martin raise its 2026 guidance?

Yes. For the second quarter in a row it raised its 2026 outlook, to sales of about $80-82 billion, diluted EPS of about $30.35-30.75 and free cash flow of about $7.8-8.0 billion, up from $7.0-7.2 billion in July.

### How did Lockheed Martin stock react to the Q3 2026 earnings?

LMT shares closed at $589.91 on 22 October 2026, up 6.96% on the day, after trading as high as $608.00, according to The Motley Fool and StockAnalysis price data.

## Sources

- [Lockheed Martin Q3 2026 earnings release, Form 8-K Exhibit 99.1 (SEC EDGAR)](https://www.sec.gov/Archives/edgar/data/0000936468/000162828026066780/ex991q32026.htm?ref=bullquill.com)
- [Lockheed Martin: Lockheed Martin Reports Third Quarter 2026 Financial Results](https://news.lockheedmartin.com/2026-10-22-Lockheed-Martin-Reports-Third-Quarter-2026-Financial-Results?ref=bullquill.com)
- [Lockheed Martin: Department of War Awards Lockheed Martin $58.62B for Multiyear PAC-3 MSE Production (29 July 2026)](https://investors.lockheedmartin.com/news-releases/news-release-details/department-war-awards-lockheed-martin-5862b-multiyear-pac-3-mse?ref=bullquill.com)
- [Lockheed Martin: Lockheed Martin Declares Fourth Quarter 2026 Dividend (9 October 2026)](https://news.lockheedmartin.com/2026-10-09-Lockheed-Martin-Declares-Fourth-Quarter-2026-Dividend?ref=bullquill.com)
- [The Motley Fool: Why Lockheed Martin Stock Soared Today](https://www.fool.com/investing/2026/10/22/why-lockheed-martin-stock-soared-today/?ref=bullquill.com)
- [StockAnalysis: Lockheed Martin (LMT) price history](https://stockanalysis.com/stocks/lmt/history/?ref=bullquill.com)
- [24/7 Wall St. via Yahoo Finance: Lockheed Martin Rises 9% as Record Backlog Lifts Outlook](https://finance.yahoo.com/markets/stocks/articles/lockheed-martin-rises-9-record-134755072.html?ref=bullquill.com)
- [GuruFocus: Lockheed Martin Q3 2026 Earnings Call Highlights](https://www.gurufocus.com/news/9137682/lockheed-martin-corp-lmt-q3-2026-earnings-call-highlights-record-292-billion-backlog-and-raised-fullyear-guidance?ref=bullquill.com)
- [Schaeffer's Investment Research: Lockheed Martin Stock Buzzing on Beat-and-Raise, Record Backlog](https://www.schaeffersresearch.com/content/news/2026/10/22/lockheed-martin-stock-buzzing-on-beat-and-raise-record-backlog?ref=bullquill.com)

This article is for information only and is not investment advice.