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Defense contractors report strong quarters as missile defense demand grows
Lockheed Martin, Northrop Grumman, and RTX combined reported record backlogs and lifted full year or adjusted guidance, with RTX adding $43 billion in new awards in the quarter.
Defense contractors are reporting earnings amid a backdrop of U.S. forces remaining engaged with Iran and lawmakers seeking funding for immediate military needs alongside long term modernization, according to MarketBeat Ratings. The earnings set up two themes investors are weighing, near term readiness tied to missile defense demand and longer term modernization plans covering next generation aircraft, interceptors, and autonomous systems. Lockheed Martin reported $20.1 billion in sales and $7.94 in EPS, with a 3.2x book to bill ratio, indicating new orders outpaced shipments by more than three to one. Its backlog reached $230 billion, and management raised full year sales guidance to $79.75 billion to $81.75 billion. Northrop Grumman posted a record $105 billion backlog, up 17% year over year, alongside $10.9 billion in quarterly sales. Its reported EPS fell 6% to $7.68 due to an accounting artifact related to last year's Training Services divestiture gain, while adjusted earnings guidance still increased. RTX reported adjusted sales up 16% organically to $24.7 billion, adjusted EPS up 21% to $1.89, and a 22% backlog increase to $289 billion. The company also reported $43 billion in new awards for the quarter, nearly $20 billion of it at its Raytheon segment, and MarketBeat Ratings highlighted the growth as a standout figure.