Lockheed Martin reported a strong second quarter, beating Wall Street’s earnings expectations and pushing its backlog to an unprecedented $230 billion. The defense contractor posted earnings per share of $7.94, well above the $7.09 consensus, while revenue climbed 11% year over year to $20.06 billion, exceeding the estimated $19.34 billion.
The company secured $65 billion in new orders during the quarter, including a $35 billion contract for the THAAD interceptor system and a $3 billion deal for GMLRS munitions. This boosted the book-to-bill ratio to 3.2, meaning Lockheed booked more than three dollars in new business for every dollar of revenue recognized. The backlog increase of roughly $64 billion from a year ago highlights solid demand.
Free cash flow rebounded to $2.9 billion in Q2, recovering from challenges related to program setbacks and supply chain disruptions faced last year. Following these results, management lifted the full-year earnings guidance to a range of $29.95 to $30.65 per share, surpassing earlier forecasts and the analyst average of $29.86. Revenue projections for 2026 were also raised to between $79.75 billion and $81.75 billion.
Segment Performance and Outlook
Lockheed’s Aeronautics segment expects sales between $31.7 billion and $32.7 billion this year, driven by increased production of F-35 and resumed deliveries of F-16 jets. The Missiles and Fire Control division is forecasted to bring in $16.5 billion to $16.9 billion, supported by munitions ramp-up later this year. Rotary and Mission Systems anticipates $17.7 billion to $18.1 billion in sales, boosted by radar programs and higher Sikorsky helicopter output.
The Space segment outlook improved as well, with expected revenue rising to $13.85 billion to $14.05 billion, fueled by the Next Generation Interceptor and Fleet Ballistic Missile programs. Options market data suggests some bullish sentiment, with January contracts showing a put-to-call ratio below 1.
Lockheed’s stock surged Thursday after these results but remained about 17% below its year-to-date peak, trading flat at $568.60 in premarket activity Friday.
