BETHESDA, Md. -- Lockheed Martin Corporation reported third quarter 2026 net sales of $20.71 billion, representing an 11 percent increase compared to the $18.61 billion reported in the third quarter of 2025. Net earnings for the period rose 14 percent to $1.85 billion, up from $1.62 billion in the corresponding prior-year quarter. Consolidated operating profit grew to $2.44 billion from $2.28 billion in the third quarter of 2025, supported by broad volume increases across all four business segments.
Total backlog expanded 27 percent sequentially from the second quarter of 2026 to reach a record $292.0 billion. Growth was principally driven by major air and defense contracting activities, including a multi-year award valued at $52.5 billion for the production of Patriot Advanced Capability-3 Missile Segment Enhancement interceptors. This surging order intake highlights sustained global defense demand and aligns directly with Pentagon and allied force-structure priorities emphasizing high-rate munitions stockpiling, integrated air and missile defense modernization, and multi-year procurement stability.
Management raised its full-year 2026 financial forecast, boosting its total sales target to between $80.0 billion and $82.0 billion. Future revenue stream predictability is solid, supported by long-term military ammunition contracts and a large volume of unfilled orders across factory lines. However, risks remain around ongoing contract negotiations with the U.S. government for future F-35 fighter jet production runs (Lots 20 and beyond). Spending on preliminary F-35 Lot 20 work went over current government-approved funding limits during the third quarter, which could create financial and operational challenges if a final agreement and additional funding are delayed.
INDUSTRY SEGMENTS
Aeronautics
Aeronautics net sales grew 13 percent year-over-year to $8.21 billion in the third quarter of 2026, up from $7.26 billion in the third quarter of 2025. This expansion was led by a $710 million volume increase across F-35 production and sustainment activities, along with a $270 million gain in C-130 operations reflecting the liquidation of pre-contract costs following a contract award. These gains were partially offset by a $130 million drop in F-16 sales caused by lower production volume and unfavorable profit adjustments.
Operating profit for Aeronautics increased 9 percent to $743 million, up from $682 million in the third quarter of 2025, while operating margin declined from 9.4 percent to 9.0 percent. The profit expansion was driven by higher overall contract volume across core aircraft programs. However, margin expansion was constrained by $40 million of net unfavorable estimate-at-completion profit adjustments, along with ongoing contractual cost pressures tied to fixed-price structures on legacy and foreign tactical fighter builds.
Missiles and Fire Control
Missiles and Fire Control net sales reached $4.50 billion in the third quarter of 2026, a 24 percent increase from $3.62 billion recorded in the prior-year period. Revenue growth was generated by accelerating production ramps across key tactical missile and air defense lines, notably driven by higher volume on the PAC-3 and High Mobility Artillery Rocket System programs to satisfy expanded U.S. government and foreign military sales requirements.
Segment operating profit rose 24 percent to $631 million compared to $510 million in the third quarter of 2025, maintaining an operating margin of 14.0 percent. Financial performance was bolstered by elevated production throughput and favorable contract mix on mature, high-rate tactical missile lines. Performance was further supported by favorable profit adjustments resulting from improved manufacturing productivity as capacity expansions matured.
Rotary and Mission Systems
Rotary and Mission Systems net sales increased 3 percent to $4.51 billion, compared to $4.37 billion in the third quarter of 2025. Sales growth was driven primarily by higher production and modernization volume on integrated warfare systems and sensors, including Aegis combat systems, along with higher delivery volume across Sikorsky helicopter production lines for domestic and international defense customers.
Segment operating profit rose 4 percent to $524 million, compared to $506 million in the third quarter of 2025, with operating margin holding steady at 11.6 percent. Operating results reflected positive contract performance and higher execution volume across mature naval radar and mission system lines. These gains were partially offset by development costs and timing-related contract mix shifts within select vertical lift software and electronics programs.
Space
Space net sales rose 4 percent to $3.49 billion in the third quarter of 2026, compared to $3.36 billion in the corresponding period of 2025. Revenue expansion was driven by increased activity in national security space programs, including strategic missile defense and satellite development, which offset lower volume across commercial satellite payload programs.
Operating profit for Space was flat at $331 million compared to the third quarter of 2025, causing operating margin to decline to 9.5 percent from 9.9 percent. Stable profit levels were sustained by execution on high-priority defense satellite constellations and fleet ballistic missile programs, offset by cost growth on fixed-price commercial space systems and higher investments in next-generation space domain awareness capabilities.
The third quarter of 2026 demonstrates robust operational positioning for Lockheed Martin, highlighted by record order intake and accelerated top-line performance across key defense domain portfolios. The expansion of multi-year contract awards, particularly in air defense and tactical strike weapons, reinforces revenue visibility and validates the company's alignment with elevated global defense spending priorities. Provided contract funding negotiations on the F-35 program reach resolution, the strong backlog provides a multi-year foundation for sustained operational execution and stable long-term cash flow generation.
