The defense contractor posted $20.1 billion in quarterly sales and now projects free cash flow of more than $7 billion for the year
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Lockheed Martin $LMT reported second-quarter sales of $20.1 billion on Thursday, up 11% from a year earlier, and raised its full-year financial guidance after results came in ahead of expectations. Lockheed Martin stock rose more than 5% in early trading.
Net earnings for the quarter were $1.8 billion, or $7.94 per share, compared to $342 million, or $1.46 per share, in the second quarter of 2025. The year-earlier period included $1.6 billion in program losses. Cash from operations reached $3.2 billion, up from $201 million a year earlier, and free cash flow was $2.9 billion, compared to negative $150 million in the prior-year quarter.
The company lifted its full-year 2026 sales outlook to approximately $79.75 billion to $81.75 billion, up from its prior guidance range of $77.5 billion to $80.0 billion. Full-year diluted earnings per share guidance was raised to $29.95 to $30.65, from the previous range of $29.35 to $30.25. Projected free cash flow increased to $7.0 billion to $7.2 billion, from $6.5 billion to $6.8 billion previously.
"We now anticipate accelerated year-over-year sales growth of approximately 8%, driving 28% higher segment operating profit, and increased free cash flow, now projected to be over $7 billion," said Lockheed Martin Chairman, President and CEO Jim Taiclet in a statement.
The Missiles and Fire Control segment was a primary growth driver, with sales rising 19% to $4.1 billion on production ramps for PAC-3, THAAD, and Precision Strike Missile programs. Aeronautics posted sales of $8.1 billion, up 9%, led by higher F-35 production volume. Rotary and Mission Systems sales rose 9% to $4.4 billion, while Space sales increased 6% to $3.5 billion.
The company reported a record backlog of $230.4 billion, up from $193.6 billion at year-end 2025, boosted by $65 billion in new orders during the quarter. The backlog for Missiles and Fire Control nearly doubled to $87.9 billion, reflecting a $35 billion multi-year contract with the Missile Defense Agency for THAAD interceptors signed during the quarter.
The strong quarter marks a reversal from earlier in the year. Lockheed posted weaker first-quarter results, when net earnings fell to $1.5 billion from $1.7 billion a year earlier, weighed down by $125 million in unfavorable profit adjustments on the F-16 program and $55 million in C-130 delivery delays. The company had reaffirmed its full-year outlook at that time without raising it.
Lockheed also has a pending acquisition in progress. The company agreed earlier this month to acquire Ultra Maritime for $3.45 billion, a deal that would expand its undersea and anti-submarine warfare capabilities within the Rotary and Mission Systems segment. That transaction remains subject to regulatory approvals and is not incorporated into the company's current financial guidance.
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