Lockheed Martin, RTX, and Northrop Grumman report strong earnings and backlogs amid a 44% increase in defense spending.
Defense primes Lockheed Martin (LMT), RTX, and Northrop Grumman (NOC) are delivering strong financial performance amid rising geopolitical tensions. LMT holds a record $194 billion backlog, while RTX posted its fourth consecutive EPS beat and a 30% annual gain. NOC, down 9% year to date, saw net income surge 82% in Q1 after a prior-year charge rolled off.
The FY2027 Department of War budget request totals $1.45 trillion, a 44% increase from FY2026, with NATO members committing to 5% of GDP on defense by 2035. Analysts highlight multi-year demand as locked in, driven by new threat vectors and economic security priorities. All three primes have reaffirmed or raised 2026 guidance and benefit from a new framework-agreement contracting model.
LMT trades at $496.61, up 5% year to date, with a 17x forward multiple and a 3% dividend yield. The sector’s resilience is underscored by Goldman Sachs Asset Management, which notes geopolitical tensions are shaping 2026 portfolios.