Lockheed Martin Corp. ( LMT ) shares slipped Tuesday even after the defense contractor posted third-quarter 2025 results that beat Wall Street expectations and raised its full-year outlook.

Strong Q3 2025 Financial Performance

Earnings per share were $6.95, exceeding the $6.35 estimate and rising from $6.80 a year earlier. Sales increased 9% year over year to $18.609 billion, edging past the $18.556 billion estimate and reflecting sustained demand across key defense and aerospace programs.

Net earnings totaled $1.6 billion, in line with the prior-year period. Cash from operations jumped to $3.7 billion from $2.4 billion, while free cash flow climbed to $3.3 billion from $2.1 billion.

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Record Backlog and Segment Revenue Highlights

The company ended the quarter with a record $179 billion backlog, equivalent to more than two and a half years of sales, driven by continued strength in global defense programs.

Aeronautics revenue rose 12% to $7.26 billion, led by higher F-35 production volume, while operating profit increased 3% to $682 million.

Missiles and Fire Control revenue advanced 14% to $3.62 billion, with operating profit up 12% to $510 million.

Rotary and Mission Systems sales held steady at $4.37 billion, and operating profit improved 5% to $506 million.

Space segment sales gained 9% to $3.36 billion, and operating profit surged 22% to $331 million.

The company’s effective tax rate increased to 16.5% from 15.4% the previous year, reflecting the impact of the One Big Beautiful Bill Act.

Lockheed Martin ( LMT ) returned $1.8 billion to shareholders through dividends and share repurchases, raised its quarterly dividend by 5% to $3.45 per share, and expanded its share buyback authorization by $2 billion to $9.1 billion.

Chairman, President, and CEO Jim Taiclet said, “Based on the effectiveness and reliability of our products and systems, strong demand from Lockheed Martin’s customers, both in the United States and among our allies, continues. As a result of this unprecedented demand, we are increasing production capacity significantly across a wide range of our lines of business.”

Outlook

Lockheed Martin ( LMT ) raised its full-year 2025 GAAP EPS guidance to $22.15–$22.35, up from $21.70–$22.00, versus the $22.41 analyst estimate.

The company also raised its sales outlook to $74.25 billion–$74.75 billion, compared with the prior range of $73.75 billion–$74.75 billion and the $74.298 billion consensus estimate.

Cash from operations is projected to be approximately $8.5 billion, with free cash flow expected to be around $6.6 billion.

Taiclet added that Lockheed Martin ( LMT ) continues to invest aggressively in digital technologies and production capacity to align with defense modernization priorities while maintaining shareholder value through disciplined capital deployment and sustained dividend growth.

Price Action: LMT shares were trading lower by 1.60% to $497.82 at last check Tuesday.

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