Lockheed Martin Corporation will report fourth quarter and full-year 2025 results before the market opens on Thursday, January 29, with investors focused on contract momentum, margin performance, and what could be game-changing news: reports that the U.S. may finally approve F-35 sales to Saudi Arabia.

The defense giant enters earnings season with a record backlog and a string of recent contract wins that reinforce its dominant position in aerospace and defense. CEO Jim Taiclet and CFO Evan Scott will host a conference call at 8:30 a.m. ET to discuss results and outlook.

Contract Momentum Building

Lockheed's recent contract activity has been robust, with wins across multiple business segments:

Space segment: The company secured a major award from the Space Development Agency (SDA) for the production of 18 satellites, valued at over $1 billion. This reinforces Lockheed's position in the rapidly growing national security space market.

Aeronautics: F-35 production continues at high rates, with the program representing Lockheed's largest revenue contributor. International demand remains strong as NATO allies and Asia-Pacific partners modernize their air forces.

Missiles and Fire Control: Hypersonic weapon programs and precision munition orders have driven segment growth, benefiting from elevated defense budgets globally.

"Reports indicated a potential shift in U.S. policy that could clear the way for the sale of F-35 fighter jets to Saudi Arabia, which would deliver a substantial boost to Lockheed's aeronautics division."

— Defense Industry Analysis

The Saudi F-35 Opportunity

Perhaps the most significant potential catalyst is the reported shift in U.S. policy regarding F-35 sales to Saudi Arabia. For years, such sales were blocked over human rights concerns and commitments made as part of Israel's Abraham Accords negotiations.

If F-35 sales to Saudi Arabia receive approval, it could represent one of the largest defense orders in history. The Kingdom has the financial resources to acquire a substantial fleet, and the F-35's capabilities would represent a generational upgrade over Saudi Arabia's current fighter inventory.

Analysts caution that such a deal, if it materializes, would likely not impact near-term results—the approval-to-delivery timeline for major defense systems spans years. However, a positive announcement would meaningfully enhance Lockheed's long-term growth trajectory.

Analyst Expectations

Wall Street expects strong results reflecting Lockheed's backlog execution:

  • Q1 2026 EPS estimate: $6.94 per share (recently raised by Zacks Research)
  • Full-year 2026 consensus: $27.15 per share
  • Revenue trajectory: Continued growth driven by F-35 production and space segment expansion

The company has a strong track record of meeting or exceeding guidance, with management known for conservative projections that it subsequently beats.

Backlog at Record Levels

Lockheed's order backlog has reached historic highs, providing visibility into years of future revenue. The backlog includes:

F-35 Lightning II: Multi-year contracts for hundreds of aircraft across U.S. and international customers

Missile defense: THAAD and PAC-3 orders driven by allied modernization programs

Space systems: GPS III satellites, Space Development Agency awards, and classified national security programs

Rotary and Mission Systems: Sikorsky helicopter programs and integrated warfare systems

This backlog reduces earnings uncertainty and provides confidence in revenue forecasts even amid potential defense budget variability.

Margin Trajectory

Investors will focus on operating margins, which have faced pressure from supply chain challenges and labor costs. Lockheed, like many defense contractors, has grappled with pandemic-era disruptions that are only now fully resolving.

Management has guided for margin improvement as production rates stabilize and efficiencies materialize. Any commentary suggesting accelerated improvement—or continued challenges—will likely move shares.

Capital Return Program

Lockheed continues to return substantial capital to shareholders through dividends and share repurchases. The company's dividend has grown consistently for over two decades, and the current yield of approximately 2.8% represents a steady income stream for long-term holders.

Share repurchases have reduced the outstanding share count, enhancing per-share metrics. Management's commitment to returning cash while maintaining investment in the business has been a consistent theme.

Geopolitical Tailwinds

The global security environment remains supportive of defense spending. Conflicts in Ukraine and the Middle East, tensions in the Taiwan Strait, and rising great power competition have spurred Western allies to increase defense budgets after years of underinvestment.

This environment benefits Lockheed across virtually every segment:

  • Fighter aircraft demand rises as air forces modernize
  • Missile defense systems gain priority amid proliferation concerns
  • Space capabilities become essential for military operations
  • Hypersonic weapons programs accelerate

Risks to Consider

Despite the favorable setup, risks remain:

F-35 program execution: The complex fighter program continues to face challenges with sustainment costs and software updates

Budget uncertainty: Defense budgets could face pressure from competing fiscal priorities or political changes

Supply chain: While improving, supplier challenges could still impact production rates

Valuation: Defense stocks have outperformed, and elevated valuations reduce margin of safety

Investment Positioning

Lockheed trades at approximately 17 times forward earnings—reasonable for a defense contractor with visible growth and strong cash generation. Of roughly 23 analysts covering the stock, 13 rate it a "Strong Buy" with only one sell recommendation.

Bulls point to the record backlog, contract momentum, and potential Saudi breakthrough. Bears worry about margin pressure and elevated expectations that leave little room for disappointment.

What Thursday Will Reveal

When Lockheed reports Thursday morning, investors will learn whether the contract momentum visible in recent announcements is translating into financial results. More importantly, any commentary on international sales opportunities—particularly the Saudi F-35 possibility—could reshape the investment thesis.

For America's largest defense contractor, the setup entering earnings appears favorable. Execution will determine whether that potential becomes reality.