Lockheed Martin LMT is expected to report second-quarter 2026 results on July 23, before market open.
The Zacks Consensus Estimate for earnings is pegged at $7.28 per share, indicating a year-over-year decline of 0.14%. The Zacks Consensus Estimate for revenues is pinned at $19.52 billion, indicating growth of 7.54% from the year-ago reported figure.
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LMT’s Earnings Surprise History
The company beat on earnings in three of the trailing four quarters and missed in one, delivering an average surprise of 9.44%.
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What Our Quantitative Model Predicts
Our proven model does not predict an earnings beat for Lockheed Martin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here as you will see below.
Earnings ESP: The company’s Earnings ESP is -2.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Lockheed Martin carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
Stocks Worth a Look
Some stocks from the industry that have the combination of factors indicating an earnings beat are RTX Corporation RTX and Northrop Grumman NOC. RTX and Northrop Grumman have an Earnings ESP of +2.02% and +0.22%, respectively. RTX has a Zacks Rank #2 and NOC carries a Zacks Rank #3 at present.
Factors That Might Have Impacted LMT’s Q2 Performance
Lockheed Martin entered the second quarter with robust demand across nearly all of its core franchises, positioning the company for sequential revenue growth following the first quarter. Management noted that first-quarter sales were partly affected by a shortened fiscal period and timing-related factors and expects sales to have rebounded in the second quarter.
The Missiles and Fire Control segment is expected to have remained a key growth driver as Lockheed Martin continues to ramp up production of high-demand missile programs, including PAC-3, JASSM, LRASM, and Precision Strike Missile (PrSM). The company has already increased PAC-3 production by more than 60% over the past two years and expects output to accelerate further as new production facilities become operational.
LMT’s Aeronautics unit is likely to have shown improvement relative to the first quarter as several temporary execution issues began to normalize. The company indicated that flight-test issues affecting the new F-16 configuration had been resolved and deliveries had resumed. In addition, C-130 deliveries resumed following the resolution of supplier-related disruptions. These improvements should have enhanced profitability in the to-be-reported quarter.
The company’s second-quarter results are expected to benefit from continued U.S. government and allied support for defense spending — particularly in missile defense, air dominance, and space systems.
Strong backlog and demand momentum are expected to boost second-quarter results. The backlog is supported by sustained global defense demand, particularly for flagship programs like the F-35, missile systems (PAC-3, THAAD), and space-based capabilities. As a result, second-quarter performance might have benefited from ongoing conversion of this backlog into revenues.
Margin recovery across the company is expected to be gradual rather than immediate. Management stated that the most significant margin improvements are anticipated in the second half of 2026, as production milestones are achieved and program risks are retired. Consequently, second-quarter profitability might have remained below historical levels despite improving revenues.
LMT Stock Price Performance
In the past three months, the stock has lost 11% compared with the industry’s decline of 0.5%.
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LMT Stock Trading at a Discount
Lockheed Martin is currently trading at a discount compared to its industry on a forward 12-month P/S basis.
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RTX is trading at a premium compared to its industry on a forward 12-month P/S basis. Northrop Grumman is trading at a discount compared to its industry on a forward 12-month P/S basis.
LMT Stock’s Liquidity
The company’s current ratio is 1.14 compared with the industry’s average of 1.12. The ratio of more than one suggests a healthy liquidity position where the business can meet its immediate financial obligations without selling long-term assets.
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Investment Thesis
Lockheed Martin is well positioned for sustained long-term growth, supported by strong demand across its core defense franchises and a substantial backlog that provides excellent revenue visibility. The company continues to win contracts for flagship programs such as the F-35 Lightning II, integrated missile defense systems, military helicopters, and precision-guided munitions, driving growth across its business segments. In addition, rising defense budgets among the U.S. and allied nations, coupled with increasing international demand for advanced military capabilities, create a favorable environment for continued revenue expansion, healthy backlog growth, and resilient cash flow generation.
However, Lockheed Martin continues to face execution risk on several complex fixed-price development programs, where production delays, technical challenges, and cost overruns can pressure profitability.
End Note
LMT benefits from its broad portfolio of advanced defense systems, which helps secure major contracts and maintain a strong order backlog. Key programs across space, aeronautics and naval defense continue to support growth.
Given its attractive valuation, revenue growth and strong liquidity, investors might consider adding LMT stock to their portfolios right now.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
