Lockheed Martin Q2 earnings beat estimates, raises guidance; stock surges 9%

Rich Smith, The Motley Fool Thu, July 23, 2026 at 11:11 AM PDT | 2 min read

• LMT +2.46%
• NVDA -0.92%

Lockheed Martin (NYSE: LMT) stock surged 9% through 1:22 p.m. ET Thursday after delivering strong earnings results this morning.

Analysts had expected Lockheed to report $7.23 per share in profit on $19.4 billion in sales for Q2 2026. Instead, the company earned $7.94 per share on $20.1 billion in sales — and subsequently raised guidance.

Lockheed Martin Q2 Earnings

Lockheed grew sales 11% year over year, while profits surged an astounding 444%, rebounding from weak results a year ago that were burdened by losses on "a classified program at Aeronautics" as well as two helicopter programs for foreign customers. Sales increased across all four of the company's main business divisions, and year-ago losses at Aeronautics and Rotary and Mission Systems (which included the helicopter programs) were erased.

Free cash flow flipped from negative $150 million to positive $2.9 billion.

This performance explains why investors were pleased.

What's Next for Lockheed Martin Stock

Turning to guidance, Lockheed continued the positive momentum.

• Full-year sales, previously forecast to fall below $80 billion, are now expected to approximate $80.8 billion, plus or minus $1 billion.
• Earnings will be roughly $0.50 per share better than previously forecast, ranging between $29.95 and $30.65.
• Free cash flow for the year should range from $7 billion to $7.2 billion, also ahead of prior expectations.

All things considered, Lockheed is doing its utmost to validate optimism about the stock. Although the shares still appear somewhat pricey when valued on GAAP profit, strong cash production has Lockheed stock trading at only about 16.5 times free cash flow.

Between its 11% sales growth rate and near-3% dividend yield, I still believe Lockheed stock is cheap enough to buy.

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