WASHINGTON D.C.: Lockheed Martin and RTX raised their 2026 financial forecasts on July 23, citing sustained demand for weapons and defense systems as the Pentagon moves to replenish stockpiles depleted by conflicts in Ukraine and Iran.
The world’s two largest defense contractors said rising military spending and increased production are expected to support future growth. Investors welcomed the outlook, sending Lockheed shares up 10.6 percent and RTX shares 7.7 percent higher.
President Donald Trump has been urging defense manufacturers to increase production as the U.S.-Israeli war on Iran and the prolonged Russia-Ukraine conflict continue to drain Pentagon inventories. He has also proposed a record US$1.5 trillion military budget for fiscal 2027, while the U.S. House of Representatives this week passed its version of a defense policy bill authorizing an unprecedented $1.15 trillion in military spending.
Demand is expected to remain strong. According to Pentagon data, the United States has used more than 50,000 rockets, missiles and rocket-propelled munitions since the start of the Russia-Ukraine conflict in 2022 and throughout the U.S. attack on Iran, which began on February 28.
At Lockheed Martin, revenue from its missiles and fire control business climbed nearly 20 percent to $4.1 billion, driven by higher production of PAC-3 and precision strike missiles, both of which have been used in the war on Iran in recent months. The business also benefited from increased production of THAAD missile interceptors after the company secured a $35 billion U.S. government contract in June to quadruple output.
“The government is giving us a lot more flexibility than they traditionally would have done… so that we can be faster,” Lockheed Martin’s CEO Jim Taiclet said on the post-earnings call.
“That’s what I hear from the deputy secretary every time we get together and beyond: faster, faster, faster,” he added, referring to U.S. Deputy Secretary of Defense Steve Feinberg.
Lockheed’s backlog of orders awaiting production rose 38.3 percent to $230.4 billion from $166.5 billion a year earlier.
“We’re in active dialogue looking at other potential opportunities. We do see a real opportunity here for more partnerships to scale production faster, particularly in Europe,” Lockheed CFO Evan Scott said on a call with Reuters.
The company now expects 2026 revenue of $79.75 billion to $81.75 billion, compared with its previous forecast of $77.5 billion to $80 billion. The updated outlook also exceeded analysts’ expectations of $79.14 billion, according to LSEG data.
RTX also reported a 22 percent increase in backlog to $289 billion, including $170 billion in commercial aerospace orders and $119 billion in defense. Strong demand for aircraft maintenance, repair and overhaul services has persisted as supply-chain disruptions and delayed aircraft deliveries have forced airlines to keep older fleets in service longer.
Sales at Raytheon, RTX’s weapons business, rose 18 percent to $8.27 billion, helped by demand for Patriot, Standard and AMRAAM missile systems.
“About half of (Raytheon’s) bookings in the first half of the year, $10 billion, came from international customers. Of that $10 billion, $7 billion came from European customers,” RTX Chief Financial Officer Neil Mitchill told Reuters.
RTX raised its 2026 adjusted sales forecast to $95 billion-$96 billion from $92.5 billion-$93.5 billion and increased its adjusted profit outlook to $7.10-$7.25 per share from $6.70-$6.90. Both Lockheed and RTX topped Wall Street’s second-quarter estimates, while RTX CEO Chris Calio said the company sees further opportunities in the Middle East and Europe amid current geopolitical developments.
