Lockheed Martin is raising its annual forecast after beating earnings on missiles and jets

Lockheed Martin $LMT raised its 2026 sales, earnings and free cash flow forecasts on Thursday after reporting third-quarter results driven by missile and jet production. Lockheed Martin stock climbed close to 5% ahead of the opening bell.

Sales increased 11% to $20.7 billion from $18.6 billion a year earlier. Net earnings rose 14% to $1.8 billion, or $7.97 per share, compared with $6.95 per share in the third quarter of 2025.

Analysts expected earnings of $7.43 per share and sales of $20.51 billion, according to Reuters.

The company has lifted its 2026 sales outlook to a range of roughly $80 billion to $82 billion, compared with the $79.75 billion to $81.75 billion it projected in July. It raised its diluted earnings-per-share range to $30.35 to $30.75 from $29.95 to $30.65. Free cash flow is expected at about $7.8 billion to $8 billion, up from $7 billion to $7.2 billion. The company said it has raised its guidance for the second consecutive quarter.

Sales at the Missiles and Fire Control segment climbed 24% to $4.5 billion on production ramps for PAC-3 and THAAD air and missile defense programs and for GMLRS and PrSM strike missiles. Aeronautics sales rose 13% to $8.2 billion, including a $710 million increase on the F-35 program and $270 million on the C-130 program. All four business segments posted year-over-year sales growth.

Backlog reached a record $292.0 billion, up 27% from the second quarter. It includes $52.5 billion tied to a multi-year award to produce PAC-3 Missile Segment Enhancement interceptors. The company said the backlog allowed it to raise its dividend for the 24th year in a row.

Lockheed Martin also said it is still hashing out terms with the federal government for contracts to build F-35s in Lot 20 and later lots. Costs on the Lot 20 advance acquisition contract began to exceed current contractual authorization and funding during the third quarter. Without additional authorization and funding, the company said, its results of operations, cash flows and financial condition will be negatively affected in future periods.

Separately, Lockheed Martin and the Department of Defense wrapped up a decade-long framework deal covering a minimum of 850 U.S. F-35 jets, along with $7 billion of spending to strengthen the industrial base, according to Reuters.

Chief Financial Officer Evan Scott told Reuters that the added capital outlays planned for the final three months of the year are earmarked for boosting the company's ability to manufacture munitions.