LMT · 10-Q · 2026Q3 · Full report

Operating Profit and Margins

LOCKHEED MARTIN CORP · 2026-10-22 · Importance 46 · Surprise 56 · In source text

Nine-month consolidated operating profit increased to $6.985 billion from $5.400 billion, while gross profit rose to $6.960 billion from $5.297 billion. Aeronautics operating profit increased 63% to $2.122 billion, primarily because the prior-year period included a $950 million classified-program reach-forward loss; its nine-month operating margin rose to 9.1% from 6.0%. RMS operating profit increased 62% to $1.384 billion as the prior-year period included $570 million of CMHP and $95 million of TUHP reach-forward losses, although 2026 included unfavorable adjustments of $125 million on Heavy Lift and $95 million on Seahawk. MFC operating profit increased 19% to $1.725 billion, while Space operating profit declined 8% to $1.072 billion due primarily to favorable performance-at-completion adjustments on commercial civil space programs in 2025.

Key facts

• Nine-month Aeronautics operating profit increased $818 million, or 63%, primarily reflecting the $950 million 2025 classified-contract loss and higher sales volume, partly offset by higher unfavorable adjustments of $165 million on F-16 and $70 million on C-130. source
• Nine-month product costs increased $2.6 billion, or 6%, compared with the same period in 2025, including approximately $1.5 billion at MFC, $600 million at Space, and $425 million at Aeronautics; the increases were partly offset by the sales impact of the 2025 classified-program reach-forward loss. source
• Quarterly product costs increased $1.9 billion, or 14%, in the quarter ended September 27, 2026; increases were approximately $805 million at Aeronautics, $750 million at MFC, $200 million at Space, and $145 million at RMS. source
• Nine-month RMS operating profit increased $529 million, or 62%, reflecting 2025 reach-forward losses of $570 million on CMHP and $95 million on TUHP, partly offset by 2026 unfavorable adjustments of $125 million on Heavy Lift and $95 million on Seahawk. source
• Quarterly MFC operating profit increased $121 million, or 24%, primarily due to higher sales volume. source
• Nine-month MFC operating profit increased $271 million, or 19%, reflecting higher sales volume and $75 million from higher net favorable PAC-3 and THAAD profit adjustments. source
• Lockheed Martin recorded $66 million of charges during the nine months ended September 28, 2025, primarily for fixed-asset write-offs from the U.S. Air Force NGAD competition and down-select decision; the after-tax charge was $52 million, or $0.22 per share. source
• Nine-month service costs decreased $113 million, or 1%, including a $485 million decrease at RMS, partly offset by approximately $305 million of higher costs at Aeronautics. source

Impact estimates