Lockheed Martin Corp

Lockheed Martin's business strengthened in the third quarter of 2026 through volume and orders, not profitability. Sales rose 11% to $20.7B in a quarter with the same 13 weeks as a year earlier, every segment grew, and full-year free cash flow guidance went up to $7.8–8.0B, yet the segment operating margin was 10.8% against 10.9%. The record $292.0B backlog is mostly long-dated, and part of the year's cash strength rests on deferred taxes and on customer and supplier funding while unbilled work piles up. The balance sheet can fund the pending acquisition, the dividend and the pension from cash and cash flow. The open risks are F-35 Lot 20 contracting and whether the munitions backlog converts at today's margins.

• Q3 sales were $20,711M vs $18,609M, net earnings $1,845M vs $1,619M, and diluted earnings per share $7.97 vs $6.95.
• Cash from operations was $3.4B vs $3.7B and free cash flow $3.0B vs $3.3B. The company says the decline primarily reflects higher customer receipts in Q3 2025.
• Backlog rose $61.6B in the quarter to $292.0B, primarily from a $52.5B multi-year award for PAC-3 MSE interceptors.
• Guidance was raised:
• sales to ~$80.0–82.0B (from $79.75–81.75B);
• diluted EPS to ~$30.35–30.75 (from $29.95–30.65);
• free cash flow to ~$7.8–8.0B (from $7.0–7.2B).
• Other quarter events:
• a July agreement to buy Ultra Maritime for $3.45B in cash;
• F-35 Lot 20 costs began exceeding funded authorization;
• a guarantee of up to $750M of borrowings by United Launch Alliance (ULA);
• a smaller $2.25B 364-day credit line, replacing a $3.0B line.

Its findings, each with the evidence, the strongest counterpoint and what would prove it wrong:

• Growth is broad and real, but it is volume, not better margins
• The record backlog is mostly long-dated
• Cash is strong, but tax timing and unbilled work flatter it
• Program-loss risk is smaller but still costs cash

Then its finances, the quality of its earnings, its management, the case for and against, and what to watch, its claims cited to the filings and checked against them.

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