Lockheed Martin beats Q3 estimates, raises 2026 outlook and outlines a 10-year F-35 framework

Lockheed Martin (LMT) reported third-quarter 2026 sales of $20.7 billion, up 11% from a year earlier with growth in all four business segments, ahead of the $20.44 billion Zacks consensus. Net earnings were $1.8 billion, or $7.97 per diluted share, up from $6.95 and above the $7.52 consensus cited by MarketBeat (Zacks had $7.49); Lockheed reports GAAP EPS only, so that is the figure the beat is measured against. Business segment operating profit rose to $2,229 million from $2,029 million, which the company attributed to munition ramps at Missiles and Fire Control. Free cash flow was $3.0 billion versus $3.3 billion a year earlier, and backlog hit a record $292.0 billion, including $52.5 billion tied to the PAC-3 MSE multi-year award.

The company raised its 2026 outlook: sales to $80.0 billion to $82.0 billion from $79.75 billion to $81.75 billion, diluted EPS to $30.35 to $30.75 from $29.95 to $30.65, and free cash flow to $7.8 billion to $8.0 billion. Separately, management described a 10-year framework with the Department of War covering 850 U.S. F-35s and holding production at 156 aircraft a year including allied sales. It is not yet a finalized contract: the release says production contracts for F-35 lots 20 and higher are still in negotiation, and the CFO said signing Lot 20 this year would be upside not included in guidance. Aeronautics sales rose 13% to $8.21 billion, but its margin slipped to 9.0% from 9.4%, and F-35 deliveries were 43 in the quarter versus 46 a year earlier.

Investors rewarded the beat and raise: the shares closed up 6.96% at $589.91 on Oct. 22. What to watch next is whether the F-35 framework converts into signed lot contracts, how Aeronautics margins trend while Lot 20 costs run ahead of funding, and whether munitions demand keeps carrying segment profit growth.