Lockheed Martin Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 23 July 2026: press release. Guidance figures: 7 raised, 1 lowered, 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Sales rose 11% in all segments: Sales were $20.1 billion, up $1.9 billion or 11%, with all four segments higher on increased volume and munitions ramps. Six-month sales were $38.1 billion, up 5%. Source
• Operating profit rose against 2025 losses: Consolidated operating profit was $2,479 million, against $748 million. Operating margin was 12.4% against 4.1%. Six-month consolidated operating profit was $4,542 million against $3,120 million. Source
• Aeronautics margin rose to 9.4%: Aeronautics sales were $8,112 million, up $692 million, with F-35 production volume adding $475 million. Operating profit was $760 million against a $98 million loss a year earlier. Source
• Munitions ramps lifted missile sales: Missiles and Fire Control added $560 million on integrated air and missile defense from PAC-3 and THAAD production ramps, and $100 million on PrSM tactical and strike missiles. Source
• Orders of $65 billion this quarter: New orders totaled $65 billion in the quarter, which management said lifts backlog to its highest level. Source
• Free cash flow reached $2.9 billion: Free cash flow was $2.9 billion against negative $150 million. Cash from operations was $3.2 billion against $201 million. Source

“We are delivering on our strategy, achieving a higher trajectory for our business and giving us confidence to raise our full year financial guidance.”

Lockheed Martin Chairman, President and CEO Jim Taiclet

Guidance

What changed from last quarter

• Guidance raised: Full-year sales, segment operating profit, sales growth and free cash flow guidance raised, per management. Source
• Guidance raised: Diluted EPS range raised to about $29.95 to $30.65 from $29.35 to $30.25. Source
• Guidance raised: Free cash flow range raised to about $7,000 to $7,200 million from $6,500 to $6,800 million. Source
• Guidance lowered: Capital expenditure range lowered to about $2,000 to $2,400 million from $2,500 to $2,800 million. Source
• Guidance kept: Total FAS/CAS pension adjustment kept at about $1,365 million. Source
• New: Signed a $35 billion multi-year contract with the Missile Defense Agency for THAAD interceptors during the quarter. Source
• New: Agreement to acquire Ultra Maritime, described as recently announced; not reflected in guidance. Source
• New: Company no longer subject to CAMT this year under the Tax Act and Treasury Notice 2026-7. Source

Results and growth drivers

• Sales rose 11% in all segments: Sales were $20.1 billion, up $1.9 billion or 11%, with all four segments higher on increased volume and munitions ramps. Six-month sales were $38.1 billion, up 5%. Source
• Operating profit rose against 2025 losses: Consolidated operating profit was $2,479 million, against $748 million. Operating margin was 12.4% against 4.1%. Six-month consolidated operating profit was $4,542 million against $3,120 million. Source
• Net earnings and EPS both rose: Net earnings were $1,836 million, or $7.94 per diluted share, against $342 million, or $1.46. Six-month net earnings were $3,324 million, against $2,054 million. Source

Segment results

• Aeronautics margin rose to 9.4%: Aeronautics sales were $8,112 million, up $692 million, with F-35 production volume adding $475 million. Operating profit was $760 million against a $98 million loss a year earlier. Source
• Missiles and Fire Control grew 19%: Sales were $4,101 million, up 19%. Operating profit was $594 million, up 24%, with margin of 14.5% and $60 million of higher net favorable profit adjustments. Source
• Rotary and Mission Systems back to profit: Sales were $4,354 million, up 9%, with Sikorsky helicopter sales $255 million higher. Operating profit was $437 million against a $172 million loss; margin was 10.0%. Source
• Space sales up, profit flat: Sales were $3,496 million, up 6%, with strategic and missile defense volume on FBM and NGI adding $190 million. Operating profit was $371 million against $362 million; margin 10.6% against 10.9%. Source

“Over the quarter, we took a major step forward in transforming munitions production, putting the framework agreements we announced earlier this year into action”

Lockheed Martin Chairman, President and CEO Jim Taiclet

Products and customers

• Munitions ramps lifted missile sales: Missiles and Fire Control added $560 million on integrated air and missile defense from PAC-3 and THAAD production ramps, and $100 million on PrSM tactical and strike missiles. Source
• Sanctum counter-drone reached live fire: Management said Sanctum went from concept to successful live fire testing in 45 days, combining a battle manager, radar, launcher and missile into one engagement chain. Source
• Undersea and destroyer programs grew: Mission Integrated Command and Control sales rose $115 million on undersea combat systems and the River Class Destroyer program. Source

Costs, margins and profit adjustments

• 2025 losses did not recur: Segment operating profit rose $1.6 billion, mainly because 2025 reach-forward losses did not repeat, and munitions ramps at Missiles and Fire Control added profit. Source
• Non-service pension expense eased: Interest expense was $266 million against $274 million. Non-service FAS pension expense was $80 million against $99 million. Source
• Effective tax rate fell to 15.7%: The rate was 15.7% against 18.0%, attributed to lower interest expense on the uncertain tax position and the 2025 reach-forward losses. Source

Demand and the order book

• Orders of $65 billion this quarter: New orders totaled $65 billion in the quarter, which management said lifts backlog to its highest level. Source
• Missiles and Fire Control backlog rose: Missiles and Fire Control backlog was $87,882 million, against $46,650 million at December 31, 2025. Aeronautics backlog fell to $54,356 million from $59,435 million. Source
• Sustainment volume lower on F-16 and C-130: Aeronautics sales on F-16 and C-130 programs were $120 million lower, due to lower volume on sustainment contracts. Source

Cash, capital and tax

• Free cash flow reached $2.9 billion: Free cash flow was $2.9 billion against negative $150 million. Cash from operations was $3.2 billion against $201 million. Source
• Customer receipts and tax timing drove cash: Cash from operations and free cash flow each rose $3.0 billion, mainly from the timing of customer receipts and lower tax payments. Source
• Capital spending and internal research: Capital expenditures were $318 million and independent research and development was $558 million in the quarter. Source
• Dividends paid, no buybacks this year: Six-month dividends were $1,612 million against $1,567 million. No common stock was repurchased, against $1,250 million a year earlier. Source
• Current debt maturities cleared: Long-term debt repayments were $1,168 million in the six months. Current maturities of long-term debt were nil at June 28, 2026. Source

Strategy, partnerships and acquisitions

• 21st Century Security strategy credited: Management said the quarter's performance reflects its 21st Century Security strategy, with focus on integration, partnerships and operational excellence. Source
• Manufacturing investment with GM Defense and Rheinmetall: Management said it is investing to strengthen global defense manufacturing through a General Motors Defense collaboration in the U.S. and a Rheinmetall agreement to co-produce ATACMS in Europe. Source
• Ultra Maritime agreement noted: A recently announced agreement to acquire Ultra Maritime is noted in the release. No closing date is given. Source

Coming up, as management said on 23 July 2026

• Ultra Maritime closing pending: Guidance will not reflect the Ultra Maritime acquisition until it is consummated. The release gives no closing date. Source
• Lower federal tax payments in 2026: Management expects reduced federal income tax payments for 2026. Source

Figures management reported

Risks management discussed

• Operational: Unfavorable profit adjustments hit Heavy Lift and Seahawk programs in the quarter, offset in part by higher net favorable adjustments elsewhere. Source
• Operational: Net favorable profit adjustments at Aeronautics were $160 million lower across the portfolio. Source

Earlier plans management reported on

• Met: Management said results reflect consistent performance on commitments it has made, alongside investment for future customer missions. Source
• Not stated: Management described the quarter as putting the earlier munitions framework agreements into action. Source
• Not stated: The April release reaffirmed 2026 guidance; this release cites confidence to raise it. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.