Lockheed Martin Reports Third
Record backlog of $292.0 billion, including $52.5 billion associated with the multi-year award to produce PAC-3 Missile Segment Enhancement (MSE) interceptors
Oct. 22, 2026 – Lockheed Martin Corporation [NYSE: LMT] today reported third quarter 2026 sales of $20.7 billion, compared to $18.6 billion in the third quarter of 2025. Net earnings in the third quarter of 2026 were $1.8 billion, or $7.97 per share, compared to $1.6 billion, or $6.95 per share. Cash from operations was $3.4 billion in the third quarter of 2026, compared to $3.7 billion in the third quarter of 2025. Free cash flow was $3.0 billion in the third quarter of 2026, compared to $3.3 billion in the third quarter of 2025. Backlog grew 27% since the second quarter of 2026, setting another new record at $292.0 billion.
“Our strong third quarter performance underscores Lockheed Martin’s continuing leadership in the development and delivery of advanced and reliable defense technology solutions. Every day, our research, engineering and production teams are putting highly effective and scalable capabilities in the field. We strive to improve mission performance on a continuous basis by combining proven systems like Aegis, F-35, and Hellfire with the latest digital technologies including AI and Autonomy. We are doing this by integrating our internal innovative solutions with those of start-ups, new entrants into our industry, and commercial technology leaders.” said Lockheed Martin Chairman, President and CEO Jim Taiclet.
“By pulling through our existing platforms and systems using innovations from multiple sources and with newly available digital technology, we can drive elevated growth in our financial performance as well. 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 24 th year in a row. The sustained financial momentum across our portfolio gives us confidence to increase our outlook for sales, earnings per share and free cash flow, the second consecutive quarter we have raised our financial guidance.” 1
Sales: Third quarter 2026 sales increased $2.1 billion, or 11%, driven by growth in each of the company's four business segments.
: Third quarter 2026 business segment operating profit increased $200 million due to munition ramps at Missiles and Fire Control and higher volume at Aeronautics.
Net Earnings and Diluted EPS: Third quarter 2026 net earnings increased $226 million and diluted earnings per share increased $1.02 primarily due to higher consolidated operating profit of $163 million described above.
Cash Flows: Third quarter 2026 cash from operations decreased $290 million and free cash flows decreased $348 million primarily due to the higher customer receipts in the third quarter of 2025. The company's cash activities during the third quarter of 2026 included capital expenditures of $439 million and independent research and development of $599 million. 2
The following guidance table contains forward-looking statements, which are based on the company's expectations at the time of this news release. Actual results may differ materially from those projected. It is the company's practice not to incorporate adjustments in its financial outlook for proposed acquisitions, divestitures, joint ventures, changes in tax laws, or special items until such items have been consummated or enacted. Refer to the “Forward- Looking Statements” section contained in this press release and Form 10-Q for factors that may impact the company’s ability to achieve guidance or meet expectations.
-in millions, except per Current Update July 2026 share data Sales ~$80,000 - $82,000 $79,750 - $81,750 Business segment operating ~$8,575 - $8,675 $8,500 - $8,700 profit1 Total FAS/CAS pension ~$1,365 ~$1,365 adjustment Diluted earnings per share ~$30.35 - $30.75 $29.95 - $30.65 Cash from operations ~$10,000 - $10,200 $9,200 - $9,400 Capital expenditures ~$2,100 - $2,300 $2,000 - $2,400 Free cash flow1 ~$7,800 - $8,000 $7,000 - $7,200 Business segment operating profit and free cash flow are non-GAAP measures. See 1 the "Use of Non-GAAP Financial Measures" section of this news release for more information.
The company remains in negotiations with the U.S. Government on the production contracts for F-35 lots 20 and higher. The company's costs incurred began to exceed the current contractual authorization and funding on the Lot 20 advance acquisition contract during the third quarter of 2026. Without additional contractual authorization and funding from the U.S. Government, the company's results of operations, cash flows, and financial condition will be negatively impacted in future periods. 3
Third quarter 2026 sales increased $958 million, or 13%, compared to the third quarter of 2025. The increase was primarily due to higher sales of $710 million on the F‑35 program as a result of higher volume on production and sustainment contracts and $270 million on the C-130 program due to the liquidation of pre- contract costs incurred in anticipation of a contract award in the third quarter of 2026. These increases were partially offset by lower sales of $130 million on the F-16 program due to lower production volume and the sales impact of unfavorable profit adjustments recognized.
Third quarter 2026 operating profit increased $61 million, or 9%, compared to the third quarter of 2025. The increase was primarily attributable to the higher sales volume previously described, partially offset by higher unfavorable profit adjustments of $40 milli on on the F-16 program and $40 million on the C-130 program. 5
Third quarter 2026 sales increased $877 million, or 24%, compared to the third quarter of 2025. The increase was primarily attributable to higher sales of $480 million on integrated air and missile defense programs due to production ramps (Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense (THAAD)), and $330 million on tactical and strike missile programs due to production ramps ( Guided Multiple Launch Rocket Systems ( GMLRS) and Precision Strike Missile (PrSM)).
Third quarter 2026 operating profit increased $121 million, or 24% , compared to the third quarter of 2025. The increase was primarily attributable to higher sales volume previously described. 6
Third quarter 2026 sales increased $138 million, or 3%, compared to the third quarter of 2025. The increase was attributable to higher sales of $140 million on Sensors, Effectors & Mission Systems (SEMS) programs due to higher volume on radar programs.
Third quarter 2026 operating profit increased $18 million, or 4%, compared to the third quarter of 2025 primarily due to a $40 million favorable profit adjustment upon the resolution of a contracting matter, offset by unfavorable profit adjustments of $45 million on Heavy Lift and Seahawk programs in the third quarter of 2026. 7
Third quarter 2026 sales increased $129 million, or 4%, compared to the third quarter of 2025. The increase was primarily attributable to higher sales of $185 million on strategic and missile defense programs due to higher volume on the Fleet Ballistic Missile (FBM) and Next Generation Interceptor (NGI) programs, partially offset by lower sales of $115 million for national security space programs due to the program lifecycle on the OPIR mission.
Third quarter 2026 operating profit was comparable to the third quarter of 2025.
The company's effective income tax rates were 15.1% and 16.5% for the quarters ended September 27, 2026 and September 28, 2025. The decrease was primarily attributable to increased tax deductions for foreign derived deduction eligible income (FDDEI), partially offset by the absence of the favorable resolution of certain federal income tax audit items as compared to the prior year.
This news release contains the following non-generally accepted accounting principles (non-GAAP) financial measures (as defined by U.S. Securities and Exchange Commission (SEC) Regulation G). While management believes that these non-GAAP financial measures may be useful in evaluating the financial performance of the company, this information should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. In addition, the company's definitions for non-GAAP financial measures may differ from similarly titled measures used by other companies or analysts.
Business segment operating profit represents operating profit from the company's business segments before unallocated income and expense. This measure is used by the company's senior management in evaluating the performance of its business segments and is a performance goal in the company's annual incentive plan. Business segment operating margin is calculated by dividing business segment operating profit by sales. The table below reconciles the non-GAAP measure business segment operating profit with the most directly comparable GAAP financial measure, consolidated operating profit.
-in millions Current Update July 2026 Business segment operating profit ~$8,575 - $8,675 $8,500 - $8,700 (non-GAAP) FAS/CAS operating adjustment1 ~1,685 ~1,685 Intangible asset amortization ~(200) ~(200) expense Other, net ~(540) ~(490) Consolidated operating profit ~$9,520 - $9,620 $9,495 - $9,695 (GAAP) Reflects the amount by which total CAS pension cost of $1.7 billion exceeds FAS pension service cost and excludes non-service FAS 1 pension expense. Refer to the supplemental table "Selected Financial Data" included in this news release for a detail of the FAS/CAS operating adjustment.
Free cash flow is a non-GAAP financial measure that the company defines as cash from operations less capital expenditures. The company's capital expenditures are comprised of equipment and facilities infrastructure and information technology (inclusive of costs for the development or purchase of internal-use software that are capitalized). The company uses free cash flow to evaluate its business performance and overall liquidity. While management believes that free cash flow as a non-GAAP financial measure may be useful in evaluating the company's financial performance, it should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP and may not be comparable to similarly titled measures used by other companies. 9
Lockheed Martin Corporation will webcast live the earnings results conference call (listen-only mode) on Thursday, October 22, 2026, at 8:30 a.m. ET on the Lockheed Martin Investor Relations website at www.lockheedmartin.com/investor . The accompanying presentation slides and relevant financial charts are also available at www.lockheedmartin.com/investor .
For additional information, visit the company’s website: www.lockheedmartin.com .
Lockheed Martin is a global defense technology company driving innovation and advancing scientific discovery. Our all-domain mission solutions and 21st Century Security® vision accelerate the delivery of transformative technologies to ensure those we serve always stay ahead of ready. More information at www.lockheedmartin.com . # # #
Investor Relations Contacts: Mark Kvasnak, Vice President, Investor Relations Jessica Serafin, Director, Investor Relations
This news release contains statements that, to the extent they are not recitations of historical fact, constitute forward-looking statements within the meaning of the federal securities laws, and are based on Lockheed Martin’s current expectations and assumptions. The words “believe,” “estimate,” “anticipate,” “project,” “intend,” “expect,” “plan,” “outlook,” “scheduled,” “forecast” and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties. Actual results may differ materially due to factors such as:
• the company's reliance on contracts with the U.S. Government, which are dependent on U.S. Government funding and can be terminated for convenience, and the company's ability to negotiate favorable contract terms;
• budget uncertainty, the risk of future budget cuts, the impact of continuing resolution funding mechanisms, the debt ceiling and government shutdowns, and changing funding and acquisition priorities;
• risks related to the development, production, sustainment, performance, schedule, cost and requirements of complex and technologically advanced programs, including the F-35 program;
• the timing of contract awards or contract definitization, the outcome of contract negotiations, decisions by government customers to impose contract terms following undefinitized contract actions, achievement of performance milestones, customer acceptance of product deliveries, and receipt of customer payments;
• the company's ability to recover costs under U.S. Government contracts, the mix of fixed-price and cost-reimbursable contracts and the risks inherent in preparing estimates for fixed-price contracts (particularly for complex and technologically advanced programs);
• customer procurement and other policies, laws, regulations and executive actions that affect the company and its industry, programs, future opportunities, and financial performance, including those relating to mission priorities, competing domestic and international spending, contracting terms (such as fixed-price requirements), acquisition process reforms, treatment of contractor performance issues, and contractor access to competitive opportunities;
• planned production rates and orders for significant programs, compliance with stringent performance and reliability standards, and materials availability, including government furnished equipment, rare earth minerals and microelectronics;
• performance and/or financial viability of key suppliers, teammates, joint ventures (including United Launch Alliance, for which the company has provided guarantees and expects to provide additional financial support), joint venture partners, subcontractors and customers;
• changes in economic, capital market and political conditions in the U.S. and globally;
• government actions that restrict or prevent the sale or delivery of the company's products (such as delays in approvals for exports requiring Congressional notification);
• foreign policy and international trade actions taken by governments such as tariffs, sanctions, embargoes, export and import controls, buying preferences, and other trade restrictions;
• the company's success expanding into and doing business in adjacent markets and internationally and the risks posed by international sales, including potential effects from fluctuations in currency exchange rates;
• changes in non-U.S. national priorities and government budgets and planned orders;
• the company's ability to develop and commercialize new technologies and products, including emerging digital and network technologies and capabilities;
• the company's ability to develop and integrate artificial intelligence and autonomy technologies into its products and operations, its use of third-party AI providers, unintended performance of AI-enabled systems, and evolving laws, regulations and contract requirements governing AI and autonomous weapon systems;
• the company's ability to benefit fully from or adequately protect its intellectual property rights; 11 • the company's ability to attract and retain a highly skilled workforce and the impact of work stoppages or other labor disruptions;
• cyber or other security threats or other disruptions faced by the company or its suppliers;
• the company's ability to implement and continue, and the timing and impact of, capitalization changes such as share repurchases, dividend payments and financing transactions, including as a result of presidential executive orders;
• changes in pension plan assumptions and actual returns on pension assets; cash funding requirements and pension annuity contracts and associated charges;
• realizing the anticipated benefits of acquisitions or divestitures, investments, joint ventures, teaming arrangements or internal reorganizations, and market volatility affecting the fair value of investments that are marked to market;
• the company's ability to successfully integrate the Ultra Maritime business and realize synergies and other expected benefits of the transaction and the potential for disruption to its or Ultra Maritime's business, customer and supplier relationships;
• the company's efforts to fund and increase production capabilities and the efficiency of its operations and improve the affordability of its products and services, including through digital transformation and cost reduction initiatives;
• the risk of an impairment of the company's assets, including the potential impairment of goodwill and intangibles;
• compliance with laws, regulations, policies, and customer requirements relating to environmental matters;
• the impact of public health crises, natural disasters and other severe weather conditions on the company's business and financial results, including supply chain disruptions and delays, employee absences, and program delays;
• changes in accounting, U.S. or foreign tax, export or other laws, regulations, and policies and their interpretation or application, and changes in the amount or reevaluation of uncertain tax positions; and
• the outcome of legal proceedings, bid protests, environmental remediation efforts, audits, administrative reviews, government investigations or government allegations that the company has failed to comply with law, other contingencies and U.S. Government identification of deficiencies in its business systems.
These are only some of the factors that may affect the forward-looking statements contained in this news release. For a discussion identifying additional important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, see the company’s filings with the U.S. Securities and Exchange Commission including, but not limited to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in the company’s most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q. The company’s filings may be accessed through the Investor Relations page of its website, www.lockheedmartin.com/investor, or through the website maintained by the SEC at www.sec.gov.
The company’s actual financial results likely will be different from those projected due to the inherent nature of projections. Given these uncertainties, forward-looking statements should not be relied on in making investment decisions. The forward-looking statements contained in this news release speak only as of the date of its issuance. Except where required by applicable law, the company expressly disclaims a duty to provide updates to forward-looking statements after the date of this news release to reflect subsequent events, changed circumstances, changes in expectations, or the estimates and assumptions associated with them. The forward-looking statements in this news release are intended to be subject to the safe harbor protection provided by the federal securities laws. 12
Sept. 27, Dec. 31, 2026 2025 ────────────────────────────────────────────────────────────────────────────── -unaudited Assets Current assets Cash and cash equivalents $ 5,960 $ 4,121 Receivables, net 3,096 3,901 Contract assets 16,899 13,001 Inventories 3,987 3,524 Other current assets 1,059 815 Total current assets 31,001 25,362 Property, plant and equipment, net 11,524 11,292 Goodwill 11,299 11,314 Intangible assets, net 1,737 1,887 Deferred income taxes 1,819 2,975 Other noncurrent assets 7,130 7,010 Total assets $ 64,510 $ 59,840 Liabilities and equity Current liabilities Accounts payable $ 5,005 $ 3,630 Salaries, benefits and payroll 3,349 3,184 taxes Contract liabilities 12,644 11,440 Current maturities of long-term — 1,168 debt Other current liabilities 3,542 3,913 Total current liabilities 24,540 23,335 Long-term debt, net 20,498 20,532 Accrued pension liabilities 3,938 3,915 Other noncurrent liabilities 5,471 5,337 Total liabilities 54,447 53,119 Stockholders’ equity Common stock, $1 par value per 230 229 share Additional paid-in capital 451 — Retained earnings 16,802 14,034 Accumulated other comprehensive -7,420 -7,542 loss Total stockholders’ equity 10,063 6,721 Total liabilities and equity $ 64,510 $ 59,840
Nine Months Ended Sept. 27, Sept. 28, Operating activities 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net earnings $ 5,169 $ 3,673 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and 1,223 1,224 amortization Stock-based compensation 269 215 Deferred income taxes 1,114 72 Impairment and other — 66 charges Reach-forward losses on — 1,615 select programs Qualified defined benefit 277 334 pension plans Changes in assets and liabilities Receivables, net 805 -1,493 Contract assets -3,898 -1,231 Inventories -463 -511 Accounts payable 1,488 1,644 Contract liabilities 1,204 38 Income taxes -244 -100 Other, net -51 -208 Net cash provided by operating 6,893 5,338 activities Investing activities Capital expenditures -1,268 -1,186 Other, net -92 -278 Net cash used for -1,360 -1,464 investing activities Financing activities Issuance of long-term debt, net of — 1,985 related costs Repayments of long-term -1,168 -142 debt Repurchases of common — -2,250 stock Dividends paid -2,408 -2,332 Other, net -118 -148 Net cash used for -3,694 -2,887 financing activities Net change in cash and 1,839 987 cash equivalents Cash and cash equivalents at beginning 4,121 2,483 of period Cash and cash equivalents at end of $ 5,960 $ 3,470 period
Total FAS pension expense and CAS 2026 2025 cost Outlook Actual ────────────────────────────────────────────────────────────────────────────── FAS pension expense $ -370 $ -924 Less: CAS pension cost 1,735 1,568 Total FAS/CAS pension adjustment $ 1,365 $ 644 Less: pension settlement charge — 479 Total FAS/CAS pension adjustment - $ 1,365 $ 1,123 adjusted1 Service and non-service cost reconciliation FAS pension service cost $ -50 $ -50 Less: CAS pension cost 1,735 1,568 FAS/CAS pension operating adjustment 1,685 1,518 Non-service FAS pension expense -320 -874 Total FAS/CAS pension adjustment $ 1,365 $ 644 Less: pension settlement charge — 479 Total FAS/CAS pension adjustment - $ 1,365 $ 1,123 adjusted1 The cost components in the table above relate only to the company's qualified defined benefit pension 1 plans. The company recognized a noncash, non-operating pretax settlement charge of $479 million in the fourth quarter of 2025.
Number of Weeks in Reporting Period1 2026 2025 First quarter 12 13 Second quarter 13 13 Third quarter 13 13 Fourth quarter 14 13 Calendar quarters are typically comprised of 13 weeks. However, the company closes its books and records on the last Sunday of each month, 1 except for the month of Dec., as its fiscal year ends on Dec. 31. As a result, the number of weeks in a reporting quarter may vary slightly during the year and for comparable prior year periods.
Full text with the tables
Exhibit 99.1
News Release
Lockheed Martin Reports Third
Quarter 2026 Financial Results
•
Sales increased 11% to $20.7 billion
•
Net earnings increased 14% to $1.8 billion, or $7.97 per share
•
Cash from operations of $3.4 billion and free cash flow of $3.0 billion
•
Record backlog of $292.0 billion, including $52.5 billion associated with the
multi-year award to produce PAC-3 Missile Segment Enhancement (MSE) interceptors
•
Updates 2026 financial outlook
BETHESDA, Md.,
Oct. 22, 2026 – Lockheed Martin Corporation [NYSE: LMT] today reported third
quarter 2026 sales of $20.7 billion, compared to $18.6 billion in the third
quarter of 2025. Net earnings in the third quarter of 2026 were $1.8 billion, or
$7.97 per share, compared to $1.6 billion, or $6.95 per share. Cash from
operations was $3.4 billion in the third quarter of 2026, compared to $3.7
billion in the third quarter of 2025. Free cash flow was $3.0 billion in the
third quarter of 2026, compared to $3.3 billion in the third quarter of 2025.
Backlog grew 27% since the second quarter of 2026, setting another new record at
$292.0 billion.
“Our strong third quarter performance underscores Lockheed Martin’s continuing
leadership in the development and delivery of advanced and reliable defense
technology solutions. Every day, our research, engineering and production teams
are putting highly effective and scalable capabilities in the field. We strive
to improve mission performance on a continuous basis by combining proven systems
like Aegis, F-35, and Hellfire with the latest digital technologies including AI
and Autonomy. We are doing this by integrating our internal innovative solutions
with those of start-ups, new entrants into our industry, and commercial
technology leaders.” said Lockheed Martin Chairman, President and CEO Jim
Taiclet.
“By pulling through our existing platforms and systems using innovations from
multiple sources and with newly available digital technology, we can drive
elevated growth in our financial performance as well. 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 24
th year in a row. The sustained financial momentum across our portfolio gives us
confidence to increase our outlook for sales, earnings per share and free cash
flow, the second consecutive quarter we have raised our financial guidance.”
1
Summary Financial Results
(in
millio…
except
per Sept. Sept. Nine Sept. Sept.
share Quarte… 27, 28, Months 27, 28,
data) Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sales $ 20,711 $ 18,609 $ 58,795 $ 54,727
Busine…
segment $ 2,229 $ 2,029 $ 6,214 $ 4,685
operat…
profit1
Unallo…
items
FAS/CAS
pension 421 380 1,264 1,138
operat…
adjust…
Impair…
and — — — -66
other
charges
Intang…
asset -49 -70 -149 -197
amorti…
expense
Other, -158 -59 -344 -160
net
Total
unallo… 214 251 771 715
items
Consol…
operat… $ 2,443 $ 2,280 $ 6,985 $ 5,400
profit
Net $ 1,845 $ 1,619 $ 5,169 $ 3,673
earnin…
Diluted
earnin… $ 7.97 $ 6.95 $ 22.36 $ 15.69
per
share
Cash
from $ 3,438 $ 3,728 $ 6,893 $ 5,338
operat…
Capital -439 -381 -1,268 -1,186
expend…
Free
cash $ 2,999 $ 3,347 $ 5,625 $ 4,152
flow1
Busine…
segment
operat…
profit
and
free
cash
flow
are
non-GA…
measur…
1 See the
"Use of
Non-GA…
Financ…
Measur…
section
of this
news
release
for
more
inform…
Sales: Third quarter 2026 sales increased $2.1 billion, or 11%, driven by growth
in each of the company's four business segments.
Business Segment Operating Profit
1
: Third quarter 2026 business segment operating profit increased $200 million
due to munition ramps at Missiles and Fire Control and higher volume at
Aeronautics.
Net Earnings and Diluted EPS: Third quarter 2026 net earnings increased $226
million and diluted earnings per share increased $1.02 primarily due to higher
consolidated operating profit of $163 million described above.
Cash Flows: Third quarter 2026 cash from operations decreased $290 million and
free cash flows decreased $348 million primarily due to the higher customer
receipts in the third quarter of 2025. The company's cash activities during the
third quarter of 2026 included capital expenditures of $439 million and
independent research and development of $599 million.
2
2026 Financial Outlook
The following guidance table contains forward-looking statements, which are
based on the company's expectations at the time of this news release. Actual
results may differ materially from those projected. It is the company's practice
not to incorporate adjustments in its financial outlook for proposed
acquisitions, divestitures, joint ventures, changes in tax laws, or special
items until such items have been consummated or enacted. Refer to the “Forward-
Looking Statements” section contained in this press release and Form 10-Q for
factors that may impact the company’s ability to achieve guidance or meet
expectations.
-in millions, except per Current Update July 2026
share data
Sales ~$80,000 - $82,000 $79,750 - $81,750
Business segment operating ~$8,575 - $8,675 $8,500 - $8,700
profit1
Total FAS/CAS pension ~$1,365 ~$1,365
adjustment
Diluted earnings per share ~$30.35 - $30.75 $29.95 - $30.65
Cash from operations ~$10,000 - $10,200 $9,200 - $9,400
Capital expenditures ~$2,100 - $2,300 $2,000 - $2,400
Free cash flow1 ~$7,800 - $8,000 $7,000 - $7,200
Business segment operating
profit and free cash flow
are non-GAAP measures. See
1 the "Use of Non-GAAP
Financial Measures" section
of this news release for
more information.
F-35 Lots 20-22 Contract Update
The company remains in negotiations with the U.S. Government on the production
contracts for F-35 lots 20 and higher. The company's costs incurred began to
exceed the current contractual authorization and funding on the Lot 20 advance
acquisition contract during the third quarter of 2026. Without additional
contractual authorization and funding from the U.S. Government, the company's
results of operations, cash flows, and financial condition will be negatively
impacted in future periods.
3
Segment Results
Nine
Quart… Months
Ended Ended
(in Sept. Sept. Sept. Sept.
mill… 27, 28, 27, 28,
Sales 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Aero… $ 8,214 $ 7,256 $ 23,279 $ 21,7…
Miss…
and 4,501 3,624 12,251 10,4…
Fire
Cont…
Rota…
and 4,511 4,373 12,856 12,6…
Miss…
Syst…
Space 3,485 3,356 10,409 9,868
Total $ 20,711 $ 18,609 $ 58,795 $ 54,7…
sales
Oper…
prof…
Aero… $ 743 $ 682 $ 2,122 $ 1,304
Miss…
and 631 510 1,725 1,454
Fire
Cont…
Rota…
and 524 506 1,384 855
Miss…
Syst…
Space 331 331 983 1,072
Total
busi…
segm… 2,229 2,029 6,214 4,685
oper…
prof…
Unal…
items
FAS/…
oper… 421 380 1,264 1,138
adju…
Impa…
and — — — -66
other
char…
Inta…
asset -49 -70 -149 -197
amor…
expe…
Othe… -158 -59 -344 -160
net
Total
unal… 214 251 771 715
items
Total
cons… $ 2,443 $ 2,280 $ 6,985 $ 5,400
oper…
prof…
4
Aeronautics
Sept. Sept. Nine Sept. Sept.
(in Quar… 27, 28, Months 27, 28,
mill… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sales $ 8,214 $ 7,256 $ 23,2… $ 21,733
Oper… 743 682 2,122 1,304
prof…
Oper… 9.0 % 9.4 % 9.1 % 6.0 %
marg…
Third quarter 2026 sales increased $958 million, or 13%, compared to the third
quarter of 2025. The increase was primarily due to higher sales of $710 million
on the F‑35 program as a result of higher volume on production and sustainment
contracts and $270 million on the C-130 program due to the liquidation of pre-
contract costs incurred in anticipation of a contract award in the third quarter
of 2026. These increases were partially offset by lower sales of $130 million on
the F-16 program due to lower production volume and the sales impact of
unfavorable profit adjustments recognized.
Third quarter 2026 operating profit increased $61 million, or 9%, compared to
the third quarter of 2025. The increase was primarily attributable to the higher
sales volume previously described, partially offset by higher unfavorable profit
adjustments of $40 milli on on the F-16 program and $40 million on the C-130
program.
5
Missiles and Fire Control
Sept. Sept. Nine Sept. Sept.
(in Quar… 27, 28, Months 27, 28,
mill… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sales $ 4,501 $ 3,624 $ 12,2… $ 10,430
Oper… 631 510 1,725 1,454
prof…
Oper… 14.0 % 14.1 % 14.1 % 13.9 %
marg…
Third quarter 2026 sales increased $877 million, or 24%, compared to the third
quarter of 2025. The increase was primarily attributable to higher sales of $480
million on integrated air and missile defense programs due to production ramps
(Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense
(THAAD)), and $330 million on tactical and strike missile programs due to
production ramps ( Guided Multiple Launch Rocket Systems ( GMLRS) and Precision
Strike Missile (PrSM)).
Third quarter 2026 operating profit increased $121 million, or 24% , compared to
the third quarter of 2025. The increase was primarily attributable to higher
sales volume previously described.
6
Rotary and Mission Systems
Sept. Sept. Nine Sept. Sept.
(in Quar… 27, 28, Months 27, 28,
mill… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sales $ 4,511 $ 4,373 $ 12,8… $ 12,696
Oper… 524 506 1,384 855
prof…
Oper… 11.6 % 11.6 % 10.8 % 6.7 %
marg…
Third quarter 2026 sales increased $138 million, or 3%, compared to the third
quarter of 2025. The increase was attributable to higher sales of $140 million
on Sensors, Effectors & Mission Systems (SEMS) programs due to higher volume on
radar programs.
Third quarter 2026 operating profit increased $18 million, or 4%, compared to
the third quarter of 2025 primarily due to a $40 million favorable profit
adjustment upon the resolution of a contracting matter, offset by unfavorable
profit adjustments of $45 million on Heavy Lift and Seahawk programs in the
third quarter of 2026.
7
Space
Sept. Sept. Nine Sept. Sept.
(in Quar… 27, 28, Months 27, 28,
mill… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sales $ 3,485 $ 3,356 $ 10,4… $ 9,868
Oper… 331 331 983 1,072
prof…
Oper… 9.5 % 9.9 % 9.4 % 10.9 %
marg…
Third quarter 2026 sales increased $129 million, or 4%, compared to the third
quarter of 2025. The increase was primarily attributable to higher sales of $185
million on strategic and missile defense programs due to higher volume on the
Fleet Ballistic Missile (FBM) and Next Generation Interceptor (NGI) programs,
partially offset by lower sales of $115 million for national security space
programs due to the program lifecycle on the OPIR mission.
Third quarter 2026 operating profit was comparable to the third quarter of 2025.
8
Income Taxes
The company's effective income tax rates were 15.1% and 16.5% for the quarters
ended September 27, 2026 and September 28, 2025. The decrease was primarily
attributable to increased tax deductions for foreign derived deduction eligible
income (FDDEI), partially offset by the absence of the favorable resolution of
certain federal income tax audit items as compared to the prior year.
Use of Non-GAAP Financial Measures
This news release contains the following non-generally accepted accounting
principles (non-GAAP) financial measures (as defined by U.S. Securities and
Exchange Commission (SEC) Regulation G). While management believes that these
non-GAAP financial measures may be useful in evaluating the financial
performance of the company, this information should be considered supplemental
to, and not a substitute for, financial information prepared in accordance with
GAAP. In addition, the company's definitions for non-GAAP financial measures may
differ from similarly titled measures used by other companies or analysts.
Business segment operating profit
Business segment operating profit represents operating profit from the company's
business segments before unallocated income and expense. This measure is used by
the company's senior management in evaluating the performance of its business
segments and is a performance goal in the company's annual incentive plan.
Business segment operating margin is calculated by dividing business segment
operating profit by sales. The table below reconciles the non-GAAP measure
business segment operating profit with the most directly comparable GAAP
financial measure, consolidated operating profit.
-in millions Current Update July 2026
Business segment operating profit ~$8,575 - $8,675 $8,500 - $8,700
(non-GAAP)
FAS/CAS operating adjustment1 ~1,685 ~1,685
Intangible asset amortization ~(200) ~(200)
expense
Other, net ~(540) ~(490)
Consolidated operating profit ~$9,520 - $9,620 $9,495 - $9,695
(GAAP)
Reflects the amount by which total
CAS pension cost of $1.7 billion
exceeds FAS pension service cost
and excludes non-service FAS
1 pension expense. Refer to the
supplemental table "Selected
Financial Data" included in this
news release for a detail of the
FAS/CAS operating adjustment.
Free cash flow
Free cash flow is a non-GAAP financial measure that the company defines as cash
from operations less capital expenditures. The company's capital expenditures
are comprised of equipment and facilities infrastructure and information
technology (inclusive of costs for the development or purchase of internal-use
software that are capitalized). The company uses free cash flow to evaluate its
business performance and overall liquidity. While management believes that free
cash flow as a non-GAAP financial measure may be useful in evaluating the
company's financial performance, it should be considered supplemental to, and
not a substitute for, financial information prepared in accordance with GAAP and
may not be comparable to similarly titled measures used by other companies.
9
Webcast and Conference Call Information
Lockheed Martin Corporation will webcast live the earnings results conference
call (listen-only mode) on Thursday, October 22, 2026, at 8:30 a.m. ET on the
Lockheed Martin Investor Relations website at www.lockheedmartin.com/investor .
The accompanying presentation slides and relevant financial charts are also
available at www.lockheedmartin.com/investor .
For additional information, visit the company’s website: www.lockheedmartin.com
.
About Lockheed Martin
Lockheed Martin is a global defense technology company driving innovation and
advancing scientific discovery. Our all-domain mission solutions and 21st
Century Security® vision accelerate the delivery of transformative technologies
to ensure those we serve always stay ahead of ready. More information at
www.lockheedmartin.com .
# # #
Media Contacts:
Corporate Communications
+1 301-214-3030, media.relations@lmco.com
Investor Relations Contacts:
Mark Kvasnak, Vice President, Investor Relations
Jessica Serafin, Director, Investor Relations
+1 301-897-6800, investor.relations@lmco.com
10
Forward-Looking Statements
This news release contains statements that, to the extent they are not
recitations of historical fact, constitute forward-looking statements within the
meaning of the federal securities laws, and are based on Lockheed Martin’s
current expectations and assumptions. The words “believe,” “estimate,”
“anticipate,” “project,” “intend,” “expect,” “plan,” “outlook,” “scheduled,”
“forecast” and similar expressions are intended to identify forward-looking
statements. These statements are not guarantees of future performance and are
subject to risks and uncertainties. Actual results may differ materially due to
factors such as:
• the company's reliance on contracts with the U.S. Government, which are
dependent on U.S. Government funding and can be terminated for convenience, and
the company's ability to negotiate favorable contract terms;
• budget uncertainty, the risk of future budget cuts, the impact of continuing
resolution funding mechanisms, the debt ceiling and government shutdowns, and
changing funding and acquisition priorities;
• risks related to the development, production, sustainment, performance,
schedule, cost and requirements of complex and technologically advanced
programs, including the F-35 program;
• the timing of contract awards or contract definitization, the outcome of
contract negotiations, decisions by government customers to impose contract
terms following undefinitized contract actions, achievement of performance
milestones, customer acceptance of product deliveries, and receipt of customer
payments;
• the company's ability to recover costs under U.S. Government contracts, the
mix of fixed-price and cost-reimbursable contracts and the risks inherent in
preparing estimates for fixed-price contracts (particularly for complex and
technologically advanced programs);
• customer procurement and other policies, laws, regulations and executive
actions that affect the company and its industry, programs, future
opportunities, and financial performance, including those relating to mission
priorities, competing domestic and international spending, contracting terms
(such as fixed-price requirements), acquisition process reforms, treatment of
contractor performance issues, and contractor access to competitive
opportunities;
• planned production rates and orders for significant programs, compliance with
stringent performance and reliability standards, and materials availability,
including government furnished equipment, rare earth minerals and
microelectronics;
• performance and/or financial viability of key suppliers, teammates, joint
ventures (including United Launch Alliance, for which the company has provided
guarantees and expects to provide additional financial support), joint venture
partners, subcontractors and customers;
• changes in economic, capital market and political conditions in the U.S. and
globally;
• the impact of inflation and other cost pressures;
• government actions that restrict or prevent the sale or delivery of the
company's products (such as delays in approvals for exports requiring
Congressional notification);
• foreign policy and international trade actions taken by governments such as
tariffs, sanctions, embargoes, export and import controls, buying preferences,
and other trade restrictions;
• the company's success expanding into and doing business in adjacent markets
and internationally and the risks posed by international sales, including
potential effects from fluctuations in currency exchange rates;
• changes in non-U.S. national priorities and government budgets and planned
orders;
• the competitive environment for the company's products and services;
• the company's ability to develop and commercialize new technologies and
products, including emerging digital and network technologies and capabilities;
• the company's ability to develop and integrate artificial intelligence and
autonomy technologies into its products and operations, its use of third-party
AI providers, unintended performance of AI-enabled systems, and evolving laws,
regulations and contract requirements governing AI and autonomous weapon
systems;
• the company's ability to benefit fully from or adequately protect its
intellectual property rights;
11
• the company's ability to attract and retain a highly skilled workforce and the
impact of work stoppages or other labor disruptions;
• cyber or other security threats or other disruptions faced by the company or
its suppliers;
• the company's ability to implement and continue, and the timing and impact of,
capitalization changes such as share repurchases, dividend payments and
financing transactions, including as a result of presidential executive orders;
• the accuracy of the company's estimates and projections;
• changes in pension plan assumptions and actual returns on pension assets; cash
funding requirements and pension annuity contracts and associated charges;
• realizing the anticipated benefits of acquisitions or divestitures,
investments, joint ventures, teaming arrangements or internal reorganizations,
and market volatility affecting the fair value of investments that are marked to
market;
• the company's ability to successfully integrate the Ultra Maritime business
and realize synergies and other expected benefits of the transaction and the
potential for disruption to its or Ultra Maritime's business, customer and
supplier relationships;
• the company's efforts to fund and increase production capabilities and the
efficiency of its operations and improve the affordability of its products and
services, including through digital transformation and cost reduction
initiatives;
• the risk of an impairment of the company's assets, including the potential
impairment of goodwill and intangibles;
• the availability and adequacy of the company's insurance and indemnities;
• compliance with laws, regulations, policies, and customer requirements
relating to environmental matters;
• the impact of public health crises, natural disasters and other severe weather
conditions on the company's business and financial results, including supply
chain disruptions and delays, employee absences, and program delays;
• changes in accounting, U.S. or foreign tax, export or other laws, regulations,
and policies and their interpretation or application, and changes in the amount
or reevaluation of uncertain tax positions; and
• the outcome of legal proceedings, bid protests, environmental remediation
efforts, audits, administrative reviews, government investigations or government
allegations that the company has failed to comply with law, other contingencies
and U.S. Government identification of deficiencies in its business systems.
These are only some of the factors that may affect the forward-looking
statements contained in this news release. For a discussion identifying
additional important factors that could cause actual results to differ
materially from those anticipated in the forward-looking statements, see the
company’s filings with the U.S. Securities and Exchange Commission including,
but not limited to, “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Risk Factors” in the company’s most recent
Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q. The
company’s filings may be accessed through the Investor Relations page of its
website, www.lockheedmartin.com/investor, or through the website maintained by
the SEC at www.sec.gov.
The company’s actual financial results likely will be different from those
projected due to the inherent nature of projections. Given these uncertainties,
forward-looking statements should not be relied on in making investment
decisions. The forward-looking statements contained in this news release speak
only as of the date of its issuance. Except where required by applicable law,
the company expressly disclaims a duty to provide updates to forward-looking
statements after the date of this news release to reflect subsequent events,
changed circumstances, changes in expectations, or the estimates and assumptions
associated with them. The forward-looking statements in this news release are
intended to be subject to the safe harbor protection provided by the federal
securities laws.
12
Lockheed Martin Corporation
Consolidated Statements of Earnings
1
(unaudited; in millions, except per share data)
Sept. Sept. Nine Sept. Sep…
Quar… 27, 28, Mon… 27, 28,
Ended 2026 2025 End… 2026 2025
──────────────────────────────────────────────────────────────────────────────
Sales $ 20,7… $ 18,6… $ 58,7… $ 54,…
Oper…
costs -18,… -16,… -51,… -49…
and
expe…
Gross 2,436 2,240 6,960 5,2…
prof…
Other
inco… 7 40 25 103
net
Oper… 2,443 2,280 6,985 5,4…
prof…
Inte… -264 -286 -799 -828
expe…
Non-…
FAS -81 -99 -241 -296
pens…
expe…
Other
non-… 74 43 179 115
inco…
net
Earn…
befo… 2,172 1,938 6,124 4,3…
inco…
taxes
Inco…
tax -327 -319 -955 -718
expe…
Net $ 1,845 $ 1,619 $ 5,169 $ 3,6…
earn…
Effe…
tax 15.1 % 16.5 % 15.6 % 16.4 %
rate
Earn…
per
comm…
share
Basic $ 8.00 $ 6.98 $ 22.45 $ 15.…
Dilu… $ 7.97 $ 6.95 $ 22.36 $ 15.…
Weig…
aver…
shar…
outs…
Basic 230.5 231.9 230.2 233…
Dilu… 231.5 232.8 231.2 234…
Comm…
shar…
repo…
in
stoc… 230 230
equi…
at
end
of
peri…
The
comp…
clos…
its
books
and
reco…
on
the
last
Sund…
of
the
cale…
quar…
to
align
its
fina…
clos…
with
its
busi…
proc…
which
was
on
Sept…
27,
for
the
third
quar…
of
2026
and
Sept…
1 28,
for
the
third
quar…
of
2025.
The
cons…
fina…
stat…
and
tabl…
of
fina…
info…
incl…
here…
are
labe…
based
on
that
conv…
This
prac…
only
affe…
inte…
peri…
as
the
comp…
fisc…
year
ends
on
Dec.
31.
13
Lockheed Martin Corporation
Business Segment Summary Operating Results
(unaudited; in millions)
Ni…
Qu… Mo…
En… En…
Se… Se… Se… Se…
27, 28, % 27, 28, %
S… 20… 20… Ch… 20… 20… Ch…
──────────────────────────────────────────────────────────────────────────────
A… $ 8,… $ 7,… 13% $ 23… $ 21… 7%
M…
a… 4,… 3,… 24% 12… 10… 17%
F…
C…
R…
a… 4,… 4,… 3% 12… 12… 1%
M…
S…
S… 3,… 3,… 4% 10… 9,… 5%
T… $ 20… $ 18… 11% $ 58… $ 54… 7%
s…
O…
p…
A… $ 743 $ 682 9% $ 2,… $ 1,… 63%
M…
a… 631 510 24% 1,… 1,… 19%
F…
C…
R…
a… 524 506 4% 1,… 855 62%
M…
S…
S… 331 331 —% 983 1,… -8%
T…
b…
s… 2,… 2,… 10% 6,… 4,… 33%
o…
p…
U…
i…
F…
o… 421 380 1,… 1,…
a…
I…
a… — — — -66
o…
c…
I…
a… -49 -70 -1… -1…
a…
e…
O… -1… -59 -3… -1…
n…
T…
u… 214 251 -1… 771 715 8%
i…
T…
c… $ 2,… $ 2,… 7% $ 6,… $ 5,… 29%
o…
p…
O…
m…
A… 9.0 % 9.4 % 9.1 % 6.0 %
M…
a… 14… % 14… % 14… % 13… %
F…
C…
R…
a… 11… % 11… % 10… % 6.7 %
M…
S…
S… 9.5 % 9.9 % 9.4 % 10… %
T…
b…
s… 10… % 10… % 10… % 8.6 %
o…
m…
T…
c… 11… % 12… % 11… % 9.9 %
o…
m…
14
Lockheed Martin Corporation
Consolidated Balance Sheets
(in millions, except par value)
Sept. 27, Dec. 31,
2026 2025
──────────────────────────────────────────────────────────────────────────────
-unaudited
Assets
Current assets
Cash and cash equivalents $ 5,960 $ 4,121
Receivables, net 3,096 3,901
Contract assets 16,899 13,001
Inventories 3,987 3,524
Other current assets 1,059 815
Total current assets 31,001 25,362
Property, plant and equipment, net 11,524 11,292
Goodwill 11,299 11,314
Intangible assets, net 1,737 1,887
Deferred income taxes 1,819 2,975
Other noncurrent assets 7,130 7,010
Total assets $ 64,510 $ 59,840
Liabilities and equity
Current liabilities
Accounts payable $ 5,005 $ 3,630
Salaries, benefits and payroll 3,349 3,184
taxes
Contract liabilities 12,644 11,440
Current maturities of long-term — 1,168
debt
Other current liabilities 3,542 3,913
Total current liabilities 24,540 23,335
Long-term debt, net 20,498 20,532
Accrued pension liabilities 3,938 3,915
Other noncurrent liabilities 5,471 5,337
Total liabilities 54,447 53,119
Stockholders’ equity
Common stock, $1 par value per 230 229
share
Additional paid-in capital 451 —
Retained earnings 16,802 14,034
Accumulated other comprehensive -7,420 -7,542
loss
Total stockholders’ equity 10,063 6,721
Total liabilities and equity $ 64,510 $ 59,840
15
Lockheed Martin Corporation
Consolidated Statements of Cash Flows
(unaudited; in millions)
Nine Months Ended
Sept. 27, Sept. 28,
Operating activities 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net earnings $ 5,169 $ 3,673
Adjustments to reconcile
net earnings to
net cash provided by
operating
activities
Depreciation and 1,223 1,224
amortization
Stock-based compensation 269 215
Deferred income taxes 1,114 72
Impairment and other — 66
charges
Reach-forward losses on — 1,615
select programs
Qualified defined benefit 277 334
pension plans
Changes in assets and
liabilities
Receivables, net 805 -1,493
Contract assets -3,898 -1,231
Inventories -463 -511
Accounts payable 1,488 1,644
Contract liabilities 1,204 38
Income taxes -244 -100
Other, net -51 -208
Net cash provided by
operating 6,893 5,338
activities
Investing activities
Capital expenditures -1,268 -1,186
Other, net -92 -278
Net cash used for -1,360 -1,464
investing activities
Financing activities
Issuance of long-term
debt, net of — 1,985
related costs
Repayments of long-term -1,168 -142
debt
Repurchases of common — -2,250
stock
Dividends paid -2,408 -2,332
Other, net -118 -148
Net cash used for -3,694 -2,887
financing activities
Net change in cash and 1,839 987
cash equivalents
Cash and cash equivalents
at beginning 4,121 2,483
of period
Cash and cash equivalents
at end of $ 5,960 $ 3,470
period
16
Lockheed Martin Corporation
Selected Financial Data
(unaudited; in millions)
Total FAS pension expense and CAS 2026 2025
cost Outlook Actual
──────────────────────────────────────────────────────────────────────────────
FAS pension expense $ -370 $ -924
Less: CAS pension cost 1,735 1,568
Total FAS/CAS pension adjustment $ 1,365 $ 644
Less: pension settlement charge — 479
Total FAS/CAS pension adjustment - $ 1,365 $ 1,123
adjusted1
Service and non-service cost
reconciliation
FAS pension service cost $ -50 $ -50
Less: CAS pension cost 1,735 1,568
FAS/CAS pension operating adjustment 1,685 1,518
Non-service FAS pension expense -320 -874
Total FAS/CAS pension adjustment $ 1,365 $ 644
Less: pension settlement charge — 479
Total FAS/CAS pension adjustment - $ 1,365 $ 1,123
adjusted1
The cost components in the table
above relate only to the company's
qualified defined benefit pension
1 plans. The company recognized a
noncash, non-operating pretax
settlement charge of $479 million in
the fourth quarter of 2025.
17
Lockheed Martin Corporation
Other Financial and Operating Information
(unaudited; in millions, except for aircraft deliveries and weeks)
Sept. 27, Dec. 31,
Backlog 2026 2025
──────────────────────────────────────────────────────────────────
Aeronautics $ 57,331 $ 59,435
Missiles and Fire Control 142,517 46,650
Rotary and Mission Systems 49,435 47,715
Space 42,701 39,822
Total backlog $ 291,984 $ 193,622
Quarters Nine
Ended Months
Ended
Aircraft Sept. 27, Sept. 28, Sept. 27, Sept.
Deliver… 2026 2025 2026 28,
2025
F-35 43 46 94 143
F-16 4 5 6 12
C-130J 2 — 10 2
Governm…
helicop… 16 22 51 55
programs
Commerc…
helicop… — 1 — 2
programs
Interna…
military 7 6 7 6
helicop…
programs
Number of Weeks in Reporting Period1 2026 2025
First quarter 12 13
Second quarter 13 13
Third quarter 13 13
Fourth quarter 14 13
Calendar quarters are typically comprised of 13
weeks. However, the company closes its books
and records on the last Sunday of each month,
1 except for the month of Dec., as its fiscal
year ends on Dec. 31. As a result, the number
of weeks in a reporting quarter may vary
slightly during the year and for comparable
prior year periods.
18