Lockheed Martin (LMT) Stock Surges 7% on Strong Q2 Beat and Record Backlog

Key Highlights

• Lockheed Martin delivered Q2 EPS of $7.94 with revenue reaching $20.1 billion, surpassing analyst expectations of $7.23 per share and $19.37 billion in sales.
• Sales climbed 11% compared to the same quarter last year, with positive contributions from each of the company’s four operating divisions.
• The defense contractor announced a record backlog of $230 billion, jumping from $186 billion in the previous quarter, boosted by a major $35 billion THAAD interceptor agreement with the Missile Defense Agency.
• Management increased full-year 2026 EPS outlook to $30.30 at the midpoint, exceeding the analyst consensus of $29.85, while revenue projections rose to $80.75 billion at the midpoint.
• Shares of LMT climbed approximately 7% in premarket trading following the announcement.

Lockheed Martin delivered impressive second-quarter results on Thursday, exceeding analyst projections for both profit and sales while upgrading its outlook for the remainder of the year. The defense giant’s shares rallied roughly 7% in premarket activity to approximately $548.50.

Lockheed Martin Corporation, LMT

The company’s Q2 adjusted earnings per share reached $7.94, beating the consensus estimate of $7.23 by a margin of $0.71. Sales totaled $20.1 billion, representing an 11% increase from the prior year and topping the expected $19.37 billion.

In the comparable quarter last year, Lockheed posted adjusted earnings of approximately $7.30 per share with revenue of $18.2 billion. The year-over-year comparison benefited from the previous period’s inclusion of $1.6 billion in losses related to a classified program and certain helicopter contracts.

Adjusted operating income soared to $2.2 billion during the quarter, a significant jump from just $571 million in the corresponding period of the previous year.

The company generated free cash flow of $2.9 billion in Q2, marking a dramatic turnaround from the negative $150 million posted in the second quarter of 2025.

Historic Backlog Growth and Enhanced Projections

The standout figure from the report: the company’s backlog expanded to an unprecedented $230 billion, jumping significantly from $186 billion at Q1’s conclusion. During the three-month period, Lockheed secured $65 billion in fresh orders.

This historic order book includes a substantial multi-year $35 billion agreement with the Missile Defense Agency focused on THAAD interceptor systems.

Performance improved across all four operating segments — aerospace, missiles, helicopters, and space — with each division posting gains in both revenue and operating profit. The Missiles and Fire Control segment emerged as a particularly strong performer, benefiting from accelerated munitions manufacturing.

Looking ahead to the full fiscal year, the company now anticipates EPS in the range of $29.95 to $30.65, with a midpoint of $30.30. This represents an increase from the previous midpoint guidance of approximately $29.80 and surpasses the Street consensus of $29.85.

Revenue projections were elevated to a range of $79.75 to $81.75 billion, with a midpoint of $80.75 billion, compared to earlier guidance of $78.8 billion and consensus estimates of $79.1 billion.

The company also raised its free cash flow expectations to $7.0 to $7.2 billion, up from the previous range of $6.5 to $6.8 billion.

Defense Spending Uncertainties Remain

Notwithstanding Thursday’s robust performance, the stock has faced headwinds in recent months. LMT entered the trading session down approximately 22% since hostilities erupted in Iran, as market participants have debated whether defense expenditures might be approaching a cyclical high.

Democratic control of the House following midterm elections has amplified these apprehensions, with fiscal constraints emerging as a persistent concern.

CFO Evan Scott addressed these worries directly on Thursday. “We continue to see support for defense to be bipartisan,” Scott stated. “If you look historically, I think that’s absolutely been the case.”

Operating profit across all business segments for the full year is now projected to fall between $8.5 and $8.7 billion, an increase from the previous range of $8.425 to $8.675 billion.

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