Lockheed Martin Rises 9% as Record Backlog Lifts Outlook; RTX Gains 2%, Northrop Grumman Advances 3%
A record backlog and back-to-back guidance raises pushed Lockheed Martin to its biggest single-day surge in months, pulling the entire defense sector along for the ride and raising the question of how much runway remains.
Lockheed Martin (NYSE:LMT | LMT Price Prediction) stock rose 9% to $602.75 on Thursday after the company reported third-quarter results that topped estimates and raised its full-year outlook on the back of a record backlog. RTX (NYSE:RTX) shares gained 2% to $195.54, while Northrop Grumman (NYSE:NOC) stock advanced 3% to $553.29. Aerospace and defense names outperformed a softer broader market.
The iShares U.S. Aerospace & Defense ETF (BATS:ITA) edged up 0.21% to $206.13. The SPDR S&P 500 ETF Trust (NYSE ARCA:SPY) declined 0.82% to $766.86. Lockheed Martin delivered sales of $20.7 billion, up 11% year over year, along with earnings of $7.97 per share and free cash flow of $3.0 billion. The company’s backlog reached a record $292 billion.
Lockheed Martin Posts Strong Quarter and Raises Guidance
Lockheed Martin exceeded Wall Street expectations for both revenue and earnings in the third quarter. Net earnings rose 14% to $1.8 billion. Growth was broad-based, with every segment posting year-over-year increases. Missiles and Fire Control revenue jumped 24%, driven by higher production of PAC-3 and THAAD systems, while Aeronautics revenue climbed 13% on increased F-35 volume.
The company raised its 2026 outlook for the second consecutive quarter. Lockheed Martin now expects revenue of $80 billion to $82 billion and earnings of $30.35 to $30.75 per share. Free cash flow guidance also moved higher to a range of $7.8 billion to $8.0 billion. Management cited sustained demand across the portfolio as the basis for the upward revision.
Record Backlog and F-35 Framework Add Visibility
Lockheed Martin’s backlog of $292 billion includes roughly $52.5 billion tied to a multi-year award for PAC-3 Missile Segment Enhancement interceptors. The company also announced a 10-year framework with the U.S. Department of War covering 850 U.S. F-35 aircraft, spare parts, modification kits, and maintenance support. The framework is intended to support annual production of 156 aircraft and improve supply-chain stability, though it is not yet a finalized contract.
Chairman, President and CEO Jim Taiclet highlighted the combination of strong quarterly cash generation and the record backlog. Lockheed Martin also raised its dividend for the 24th consecutive year. The results underscore robust demand for missile systems amid elevated global defense spending.
RTX and Northrop Grumman Participate in Sector Strength
RTX stock moved higher alongside the broader aerospace and defense group. The company supplies engines, avionics, and missile systems and has also benefited from elevated production awards in recent periods. RTX shares tracked the positive sentiment generated by Lockheed Martin’s results and backlog expansion.
Northrop Grumman stock advanced as well. Northrop Grumman focuses on aircraft, space systems, and defense electronics. Both RTX and Northrop Grumman operate in overlapping markets with Lockheed Martin, and the session’s gains reflected sector-wide interest rather than company-specific announcements from either peer.
Defense Stocks Outperform Broader Market
The modest rise in the iShares U.S. Aerospace & Defense ETF showed that Lockheed Martin’s move stood out within the group. Defense contractors have seen improved visibility from geopolitical tensions and multi-year production contracts. Similarities among Lockheed Martin, RTX, and Northrop Grumman include exposure to U.S. and allied defense budgets and long-cycle programs. Differences appear in program concentration, with Lockheed Martin more heavily tied to the F-35 and certain missile systems.
Investors should consider keeping their position sizes modest given the sensitivity of defense stocks to budget cycles and contract timing. The raised outlook and record backlog provide clearer near-term visibility for Lockheed Martin, but conversion of the F-35 framework into firm orders and sustained production ramps will remain important. Continued demand for missiles and aircraft could support the group, while any shifts in spending priorities may introduce volatility.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
