Key Highlights

  • The Canadian CDR of Lockheed Martin (NYSE:LMT) rose 6.6% to CAD 33.17 in the October 22, 2026 session, from a prior close near CAD 31.13, after third-quarter results released the same day.
  • Third-quarter sales were USD 20.711 billion, up 11%, net earnings were USD 1.845 billion and diluted EPS was USD 7.97 against USD 6.95 a year earlier.
  • Backlog reached a record USD 291.984 billion at September 27, 2026, from USD 193.622 billion at year end, including USD 52.5 billion tied to a PAC-3 MSE award.
  • The company raised 2026 EPS guidance to USD 30.35 to USD 30.75 and free cash flow to USD 7.8 billion to USD 8.0 billion from USD 7.0 billion to USD 7.2 billion.

What the Quarter Showed

Lockheed Martin reported on October 22, 2026 that third-quarter sales rose 11% to USD 20,711 million, with business segment operating profit of USD 2,229 million, up 10%. Net earnings of USD 1,845 million lifted diluted EPS to USD 7.97. Missiles and Fire Control operating profit increased to USD 631 million from USD 510 million, and Aeronautics rose to USD 743 million from USD 682 million. Cash from operations was USD 3,438 million and free cash flow was USD 2,999 million, lower than the USD 3,347 million of a year earlier. The Canadian dollar CDR gives Canadian investors currency hedged exposure to the New York shares, and it priced 6.6% higher.

Backlog and Guidance

Record backlog of USD 291,984 million compares with USD 193,622 million at December 31, 2025, and includes USD 52.5 billion tied to the PAC-3 MSE interceptor award, a missile used for air and missile defense. Full-year 2026 sales guidance is about USD 80.0 billion to USD 82.0 billion, against USD 79.75 billion to USD 81.75 billion in July. Business segment operating profit guidance is about USD 8,575 million to USD 8,675 million. Cash from operations guidance rose to about USD 10.0 billion to USD 10.2 billion from USD 9.2 billion to USD 9.4 billion, and capital spending is about USD 2.1 billion to USD 2.3 billion.

Risks and What to Watch

The company disclosed that it is still negotiating F-35 Lot 20 and later production contracts, and that costs on the Lot 20 advance acquisition contract began exceeding authorization and funding in the third quarter. It said results and cash flows would be negatively affected without additional US Government funding. A concentration in US defense budgets, program execution and CDR currency effects are further risks. Watch for the F-35 contract resolution, conversion of the record backlog into sales and the fourth-quarter report, whose date the release did not give. Currency swings between the US and Canadian dollars can also change the CDR price independent of the underlying shares, even when hedged. Political decisions on defense spending add timing uncertainty.

Where Things Stand

The question is answered by results: the CDR of Lockheed Martin (NYSE:LMT) rose 6.6% after a third-quarter beat, a record backlog and a higher 2026 outlook. The balance of evidence is positive on demand, with missile and interceptor awards expanding the backlog, but the unresolved F-35 Lot 20 negotiation and cost overruns against funding are a risk to cash flow. The next marker is a resolution of the F-35 contract and the fourth-quarter report. Backlog conversion is the main driver of future sales.