Lockheed Martin Surges 9% as Record Backlog, F-35 Mega-Deal and Earnings Beat Converge

Lockheed Martin delivered a powerful combination of third-quarter results and a landmark production agreement on October 22, sending its shares up as much as 9.4% to around $602.75 in early trading, making it the top-performing S&P 500 component on the day.

The company reported Q3 2026 revenue of $20.71 billion, up 11% year over year and ahead of the roughly $20.47 billion to $20.49 billion Wall Street consensus. GAAP earnings per share came in at $7.97, up 15% from $6.95 a year earlier and above estimates in the $7.43 to $7.52 range. Net earnings rose 14% to $1.8 billion. Operating profit reached $2.44 billion, and free cash flow of $3.0 billion nearly doubled the $1.56 billion estimate. The Missiles and Fire Control segment led growth with a 24% revenue jump to $4.5 billion, while Aeronautics rose 13% to $8.21 billion. Rotary and Mission Systems and Space grew 3% and 4%, respectively.

Lockheed's order backlog hit a record $292 billion, well above the $231.53 billion analyst estimate, anchored in part by a $52.5 billion multi-year award for PAC-3 Missile Segment Enhancement interceptors. The company raised its full-year 2026 guidance, now projecting net sales of $80 billion to $82 billion and EPS of $30.35 to $30.75, both roughly in line with prior consensus. Full-year free cash flow guidance was lifted to $7.8 billion to $8.0 billion, meaningfully above the prior $7.1 billion estimate.

Simultaneously, Lockheed and the Pentagon announced a 10-year framework agreement covering a minimum of 850 U.S. F-35 aircraft across production lots 21 through 30, described as the largest commitment in the program's roughly quarter-century history. The pact includes initial spares, modification kits, and a decade of sustainment support, and keeps annual production at 156 jets. Lockheed will also self-fund at least $7 billion in F-35 development initiatives under the deal. The agreement still requires congressional approval for multiyear funding. The program has delivered 1,344 production F-35s since inception through mid-2026 across the A, B, and C variants.