Lockheed Martin (LMT) delivered a clean Q2 earnings beat on Thursday, and the numbers gave Wall Street plenty to work with.
Lockheed Martin Corporation, LMT
The defense giant posted GAAP diluted EPS of $7.94, clearing the analyst consensus of $7.09 by a wide margin. Revenue came in at $20.06 billion, up 11% year over year and ahead of the $19.34 billion Wall Street had penciled in.
The stock surged Thursday on the results, though LMT still sits about 17% below its year-to-date high heading into Friday’s session. Premarket trading had the stock flat at $568.60.
The standout number from the quarter was the backlog. Lockheed ended Q2 with a record $230.4 billion in orders — up roughly $64 billion from a year ago. The company posted a book-to-bill ratio of 3.2-to-1, meaning it booked $3.20 in new orders for every $1 of revenue it recognized.
That backlog didn’t build itself. During the quarter, Lockheed locked in a $35 billion THAAD interceptor contract and a $3 billion GMLRS contract, among other awards. Total new orders for the quarter hit $65 billion.
Free cash flow rebounded sharply to $2.9 billion in Q2, a recovery from prior-year program losses and supply chain issues that had weighed on the business.
Guidance Gets a Lift
Management raised full-year EPS guidance to a range of $29.95–$30.65, up from the prior outlook of $29.35–$30.25. That new range sits above the analyst consensus of $29.86.
The company also lifted its 2026 revenue outlook to $79.75–$81.75 billion, compared to the previous range of $77.5–$80.0 billion. The Street had been expecting $79.14 billion.
Operationally, the quarter included resumed F-16 deliveries, increased C-130 production, and continued development of the Grizzly counter-drone system.
Segment Breakdown
Aeronautics is expected to generate $31.7–$32.7 billion in sales for the full year, with mid-single-digit growth in the second half driven by higher F-35 production.
Missiles and Fire Control is projected to bring in $16.5–$16.9 billion, with acceleration expected in the second half as munitions production ramps up.
Rotary and Mission Systems is guided to $17.7–$18.1 billion, supported by radar programs and higher Sikorsky output.
The Space segment outlook was raised to $13.85–$14.05 billion, with growth tied to the Next Generation Interceptor and Fleet Ballistic Missile programs.
Options data adds another layer to the bull case. The put-to-call ratio on January contracts sits at 0.67x — a bullish tilt. The upper price on those contracts is set near $645, implying potential upside of more than 14% from current levels over the next six months.
Wall Street’s consensus on LMT is a “Moderate Buy,” with a mean price target of around $611 — roughly 7% above where the stock traded Friday morning.
Lockheed currently pays a dividend yield of 2.42%.
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