Lockheed Martin (LMT) Q2 2026: EPS $7.94, Record $230B Backlog
Lockheed Martin's profit rebound is real, but it is smaller than the headline suggests. Diluted earnings per share came in at $7.94 against $1.46 a year ago, when a single quarter absorbed $1.6 billion of program losses ($950 million on an Aeronautics classified program, $570 million on the Canadian Maritime Helicopter Program, and $95 million on the Turkish Utility Helicopter Program). Strip out the cumulative contract adjustments that swung both quarters, and underlying earnings per share rose roughly 33% — a solid result, not a five-fold one. The more durable news sits below the income statement: backlog jumped $36.8 billion in six months to a record $230.4 billion, and the company has committed $3.45 billion to an undersea warfare acquisition it plans to fund with a mix of cash on hand and new financing — a commitment equal to roughly 91 percent of its cash balance.
1. Consolidated Balance Sheet
1-1. Major asset items
| Item | Dec 31, 2025 ($M) | Jun 28, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 4,121 | 3,791 | -8.0% |
| Receivables, net | 3,901 | 3,356 | -14.0% |
| Contract assets | 13,001 | 16,038 | +23.4% |
| Inventories | 3,524 | 4,411 | +25.2% |
| Property, plant and equipment, net | 11,292 | 11,390 | +0.9% |
| Goodwill | 11,314 | 11,298 | -0.1% |
| Intangible assets, net | 1,887 | 1,787 | -5.3% |
| Total assets | 59,840 | 62,450 | +4.4% |
The whole balance sheet story is in two lines. Contract assets rose 23.4% and inventories rose 25.2%, while six-month sales grew only 5.4%. Contract assets are work already recognized as revenue but not yet billed to the customer. A $3.0 billion build in six months means Lockheed is delivering value faster than it is collecting cash for it. The filing attributes the increase to the F-35 program at Aeronautics and to tactical and strike missiles at MFC.
Inventories tell a related story. Work-in-process climbed from $2,667 million to $3,528 million, and $1.9 billion of that balance is pre-contract cost — spending incurred before a contract is formally awarded, up from $1.5 billion at year-end. The filing identifies these as sitting primarily on the classified contracts, F-35 and F-16 programs at Aeronautics and Sikorsky programs at RMS. Those costs sit on the balance sheet on the judgment that the award is probable. Receivables actually fell 14.0%, so this is not a collection problem. It is a billing-milestone and contract-definitization problem.
