What happened
Lockheed Martin Corporation (NYSE: LMT) reported third quarter 2026 sales of $20.7 billion on Oct. 22, 2026. Net earnings were $1.8 billion, or $7.97 per share. Cash from operations was $3.4 billion. Free cash flow was $3.0 billion. Backlog reached a record $292.0 billion. Sales rose 11% from $18.6 billion a year earlier, and net earnings rose 14% from $1.6 billion.
The backlog included $52.5 billion tied to the multi-year PAC-3 MSE interceptor award. The company said the backlog helped it raise the dividend for the 24th year in a row. It also lifted 2026 guidance for sales, EPS and free cash flow. The new outlook is the second straight quarterly increase. All four segments posted year-over-year sales growth. Missiles and Fire Control led the group, with sales up 24% to $4.5 billion.
Key numbers
| Metric | Latest | Change | Source |
|---|---|---|---|
| Sales | $20.7 billion | from $18.6 billion, +11% | SEC 8-K earnings release |
| Net earnings | $1.8 billion | from $1.6 billion, +14% | SEC 8-K earnings release |
| Diluted EPS | $7.97 per share | from $6.95 per share, +$1.02 per share | SEC 8-K earnings release |
| Free cash flow | $3.0 billion | from $3.3 billion, -$348 million | SEC 8-K earnings release |
| Backlog | $292.0 billion | SEC 8-K earnings release |
Read more: Lockheed Martin (LMT) stock analysis and investment case
Why it matters
OptimistFi's case is that Lockheed Martin turns long-lived government programs into predictable revenue, cash and shareholder returns. This release supports that view. Third quarter sales rose $2.10 billion from $18.61 billion a year earlier. Net earnings rose $226 million to $1.84 billion.
The quarter also showed lower cash from operations and free cash flow than a year earlier. Even so, free cash flow was still $3.0 billion. The company raised its 2026 cash from operations outlook to $10.0 billion to $10.2 billion. Backlog rose 27% from the second quarter to a record $292.0 billion. F-35 lots 20 and higher are still under negotiation, and Lot 20 costs already exceeded current authorization and funding.
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What's next
The company will webcast its earnings call on Thursday, Oct. 22, 2026, at 8:30 a.m. ET. That is the next chance to hear how management frames the new outlook and the F-35 contract talks.
It is also the next check on whether the updated sales, EPS and free cash flow ranges still hold. If management repeats the guidance and shows progress on F-35 lot 20 funding, that would support the case. If the funding gap remains, the filing says future results of operations, cash flows and financial condition will be negatively affected.
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Sources
- SEC 8-K Exhibit 99.1 news release — Third quarter 2026 financial results, updated outlook and dividend increase.
- Form 8-K — Current report filed Oct. 22, 2026.
Read the full OptimistFi thesis on Lockheed Martin Corporation: https://optimistfi.com/stocks/LMT
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Originally published on OptimistFi, evidence-first equity research. More at optimistfi.com.
