Lockheed Martin Q2 sales beat amid moves to replenish weapons stockpiles

Lockheed Martin Corporation

Lockheed Martin Corporation

LMT

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Overview

  • U.S. defense contractor's Q2 sales rose 11% yr/yr, beating analyst expectations

  • Net earnings and EPS rose sharply from prior year, reflecting absence of large program losses

  • Company backlog reached record $230 bln, boosted by new multi-year THAAD contract


Outlook

  • Lockheed Martin raises 2026 sales outlook to $79.75 bln-$81.75 bln from $77.5 bln-$80 bln

  • Company lifts 2026 segment operating profit forecast to $8.5 bln-$8.7 bln from $8.425 bln-$8.675 bln

  • Lockheed Martin now expects 2026 free cash flow of $7 bln-$7.2 bln, up from $6.5 bln-$6.8 bln


Result Drivers

  • SEGMENT GROWTH - Sales rose across all segments, driven by increased production volumes and munitions ramps

  • ABSENCE OF PRIOR-YEAR LOSSES - Net earnings and operating profit increased mainly due to the absence of large reach-forward losses recognized in the prior year

  • MUNITIONS AND MISSILE DEFENSE - Higher sales in integrated air and missile defense programs (PAC-3, THAAD) and tactical missiles contributed to growth


Company press release: ID:nPn8HGXM4a


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Sales

Beat

$20.1 bln

$19.34 bln (17 Analysts)

Q2 EPS

$7.94

Q2 Net Income

$1.8 bln

Q2 Free Cash Flow

$2.9 bln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 14 "hold" and 1 "sell" or "strong sell"

  • The average consensus recommendation for the aerospace & defense peer group is "buy"

  • Wall Street's median 12-month price target for Lockheed Martin Corp is $591.00, about 14.9% above its July 22 closing price of $514.36

  • The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 20 three months ago


Reuters Recommended Reads

  • July 20 - Lockheed to make cheaper Patriot interceptors as air defense demand soars

  • July 21 - Northrop Grumman raises 2026 forecasts on strong weapons demand

  • July 23 - RTX lifts 2026 forecasts on aircraft repair, defense demand


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