Lockheed Martin Corp. (NYSE:LMT) on Thursday reported its fourth quarter and full year 2025 results, posting higher revenue year over year while reporting an earnings miss for the quarter.
Fourth-quarter sales rose to $20.321 billion from $18.622 billion a year earlier. Net earnings were $1.344 billion, or $5.80 per diluted share, compared with $527 million, or $2.22 per share, in the prior-year quarter.
Fourth-quarter GAAP EPS of $5.80 missed an analyst estimate of $5.86, while revenue of $20.321 billion beat an estimate of $19.849 billion.
Cash from operations in the quarter was $3.219 billion, compared with $1.023 billion a year earlier. Free cash flow was $2.756 billion, compared with $441 million in the fourth quarter of 2024, “after a pension contribution of $860 million.”
In the quarter, Aeronautics sales rose 6% year over year to $8.524 billion, with operating profit of $782 million and an operating margin of 9.2%. Missiles and Fire Control posted an 18% increase in sales to $4.020 billion, generating an operating profit of $535 million and a margin of 13.3%.
Rotary and Mission Systems reported sales of $4.616 billion, up 8% year over year, with operating profit of $468 million and a 10.1% margin. Space sales increased 8% to $3.161 billion, while operating profit was $273 million and the operating margin was 8.6%.
Full-Year 2025 results
For the full year 2025, sales increased 6% to $75.048 billion from $71.043 billion in 2024. Net earnings were $5.017 billion, or $21.49 per diluted share, compared with $5.336 billion, or $22.31 per share, a year earlier.
During the fourth quarter of 2025, the company recognized a non-operational charge of $479 million ($377 million, or $1.63 per share, after-tax) related to a pension obligation transfer completed in December 2025.
Cash from operations for the year totaled $8.557 billion, compared with $6.972 billion in 2024. Free cash flow was $6.908 billion, compared with $5.287 billion a year earlier.
The company said the increase in operating cash flow was primarily driven by working-capital changes and lower tax payments “reflecting the impact of the One Big Beautiful Bill Act (the Tax Act).”
Backlog, Capital Allocation, And Balance Sheet
Backlog totaled $193.622 billion at Dec. 31, 2025, compared with $176.040 billion a year earlier. For 2025, deliveries included 191 F-35 aircraft and 90 government helicopter program units.
“With a record $194 billion backlog, 6% year-over-year sales growth, and free cash flow generation above our prior expectation, 2025 marked a year of unprecedented demand for Lockheed Martin capabilities,” said Lockheed Martin Chairman, President and CEO Jim Taiclet.
“We will continue to deliver superior, reliable capabilities to U.S. and Allied militaries to strengthen deterrence and provide overwhelming combat advantage, while providing strong results and value to our shareholders.”
During the year, Lockheed reported capital expenditures of $1.6 billion, independent research and development of $2.0 billion, cash dividends of $3.1 billion, and repurchases of 6.6 million shares for $3.0 billion. Cash and cash equivalents ended the year at $4.121 billion, while long-term debt, net, was $20.532 billion.
Outlook
For 2026, Lockheed forecast sales of $77.500 billion to $80.000 billion and diluted GAAP EPS of $29.35 to $30.25, compared with an EPS estimate of $29.14 and a sales estimate of $77.831 billion.
The company projected free cash flow of $6.5 billion to $6.8 billion and said its outlook “does not include potential impacts of government shutdown, or Executive Orders issued by the Administration.”
THAAD Production Framework Agreement
Additionally, Lockheed Martin said it signed a framework agreement with the Department of War to quadruple annual production of Terminal High Altitude Area Defense (THAAD) interceptors from 96 to 400 over the next seven years, building on an agreement signed earlier this month to accelerate PAC-3 MSE interceptor production.
The company said it will break ground in Camden, Arkansas, on a new Munitions Acceleration Center supporting THAAD, PAC-3 and other capabilities.
LMT Price Action: Lockheed Martin shares were up 7.65% at $642.99 at the time of publication on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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