Lockheed Martin’s second-quarter earnings look much stronger than last year, largely because a set of one-time losses from 2025 didn’t repeat this time around.
The defense contractor reported second quarter 2026 sales of $20.1 billion, up 11% from $18.2 billion a year earlier, while net earnings jumped to $1.8 billion, or $7.94 per share, compared to just $342 million, or $1.46 per share, in the same quarter last year.
Much of that swing traces back to a rough second quarter in 2025, when Lockheed absorbed $1.6 billion in program losses tied to a classified Aeronautics contract and two helicopter programs, Canada’s Maritime Helicopter Program and Turkey’s Utility Helicopter Program.
With those losses behind it, this year’s results look considerably stronger by comparison, though the company also saw genuine growth from higher production volumes, particularly on the F-35 program and various missile programs.
Cash generation told a similar story. The company brought in $3.2 billion from operations this quarter, compared to just $201 million a year ago, while free cash flow came in at $2.9 billion versus a negative $150 million in the same period last year.
A record backlog, and a defining new contract
Lockheed’s order backlog climbed to a record $230 billion, up from $193.6 billion at the end of 2025. A major driver behind that jump was a $35 billion multi-year contract with the Missile Defense Agency to produce THAAD interceptors, part of what Chairman, President and CEO Jim Taiclet described as a broader effort to modernize how the company builds munitions.
“We took a major step forward in transforming munitions production, putting the framework agreements we announced earlier this year into action by signing a $35 billion multi-year contract with the Missile Defense Agency for THAAD,” Taiclet said.
He also pointed to the company’s Sanctum counter-drone system, which went from concept to live-fire testing in just 45 days, combining a battle manager, radar, launcher, and missile into a single system. Taiclet added that Lockheed is also investing in expanding its manufacturing base, citing a collaboration with General Motors Defense in the US and an agreement with Rheinmetall to co-produce ATACMS missiles in Europe.
How the different divisions performed
Lockheed’s four business segments, Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space, all posted sales growth this quarter, though the size of that growth varied.
Missiles and Fire Control saw the steepest increase, with sales up 19% to $4.1 billion, driven largely by production increases on the PAC-3 and THAAD missile defense programs, along with the Precision Strike Missile program. Aeronautics grew 9% to $8.1 billion, helped by higher volume on F-35 production contracts, while Rotary and Mission Systems also grew 9%, to $4.4 billion, and Space grew 6% to $3.5 billion.
Aircraft deliveries told a more mixed story. Lockheed delivered 19 F-35 jets during the quarter, down sharply from 50 a year earlier, while C-130J deliveries rose to seven from just one. Government helicopter program deliveries slipped slightly to 16, from 24 a year ago.
Raising the outlook for the rest of the year
Lockheed said the strength of its second quarter gave it enough confidence to raise its full-year financial guidance. The company now expects sales growth of approximately 8% for 2026, along with a 28% increase in segment operating profit and free cash flow projected to exceed $7 billion, up from earlier guidance.
Taiclet tied the improved outlook directly to the company’s broader strategy.
“This continued performance reflects more than just increased customer demand – it is evidence that our 21st Century Security strategy, and its focus on integration, partnerships and operational excellence is working,” he said, adding that the results give the company “confidence to raise our full year financial guidance.”