Lockheed Martin Jumped About 10% After a Record $230 Billion Backlog.
By The Numbers
- $20.1B — Q2 sales, up 11% year over year
- $7.94 — Diluted EPS vs roughly $7.20–$7.23 consensus
- $65B — New orders booked in the quarter
- $230B — Record backlog including multi-year THAAD
- ~+10.5% — Regular-session surge on the beat-and-raise
Lockheed Martin Corporation (LMT) just showed what a defense budget looks like when demand stops being theoretical. Second-quarter sales hit $20.1 billion, up 11% from a year earlier. Diluted EPS came in at $7.94. New orders reached about $65 billion. Backlog climbed to a record $230 billion. The stock ripped roughly 10.5% on the session.
Wall Street had been closer to the high-$7s on EPS and high-$19 billions on sales. Cash from operations printed $3.2 billion. Free cash flow hit $2.9 billion after a prior-year quarter that was barely above water. Management raised full-year 2026 sales to about $79.75 billion to $81.75 billion, diluted EPS to $29.95 to $30.65, and free cash flow to roughly $7.0 billion to $7.2 billion.
The THAAD Math
It's kinda like a factory that finally got a multi-year purchase order instead of a handshake. Lockheed signed a $35 billion multi-year contract with the Missile Defense Agency for THAAD interceptors. That is not a press-tour flourish. That is backlog you can model.
CEO Jim Taiclet tied the raise to the company's 21st Century Security strategy and munitions production transformation. Missiles and Fire Control strength was already visible in the sales mix. When geopolitics stays hot, contractors with actual production lines get paid first.
"Record backlog is not a vibe. It is deferred revenue with a uniform on it."
What Investors Should Not Miss
Hold on. Let me stop here. Prior-year EPS comparisons look explosive partly because 2025 absorbed heavy program charges. The cleaner tell is cash generation plus the guidance raise plus the order book. Free cash flow swinging from negative territory a year ago to nearly $3 billion this quarter is the operating story.
RTX Corporation (RTX) also jumped hard on its own beat, so this is not one lonely ticker. Capital is rotating toward names that monetize elevated defense demand while growth multiples compress under $100 oil and higher yields.
Bottom Line
You do not have to trust me. Trust the $230 billion backlog. Trust the $65 billion order haul. Trust a full-year free-cash-flow raise above $7 billion. If your portfolio still treats defense as a sleepy utility with missiles, Thursday's tape just corrected that model.
P.S. The next question is not whether demand exists. It is which contractors convert backlog into cash without another round of program charges.