World’s biggest arms manufacturer sees profits soar as global conflict rages

Lockheed Martin has seen a surge in demand for its advanced fighter jets and weapons systems

Lockheed Martin has projected 2026 profits and revenue that surpass Wall Street's expectations, driven by sustained global demand for its advanced fighter jets and weapons systems.

Following the announcement, the company's shares saw a 7.1% increase in early New York trading.

The surge in demand for armaments is largely attributed to ongoing conflicts in the Middle East and Russia's prolonged war in Ukraine, significantly boosting sales for major defence contractors such as Lockheed.

Further exacerbating geopolitical tensions is the recent capture of the Venezuelan president by U.S. forces.

Lockheed's F-35 and F-22 fighter jets, RQ-170 stealth drones and Sikorsky Black Hawk helicopters were used in the operation, CEO Jim Taiclet told investors on a post-earnings conference call.

Soldiers stand by Belgium's air force first ever F-35 fighter jets. (AFP/Getty)

Earlier this month, Lockheed clinched a seven-year agreement with the Department of Defense to boost production of Patriot PAC-3 missile interceptors to 2,000 units annually, up from 600.

Lockheed also said on Thursday that it had reached a deal with the department to more than quadruple production of its Terminal High Altitude Area Defense, or THAAD, missile interceptors to 400 per year, up from 96 previously.

If Lockheed Martin exceeds certain production and profit goals on its Patriot and THAAD contracts, management said "we start to share some of the increased profits with the U.S. government by plowing some of those increased profits back" into spares or the factory.

Conversely, if Congressional appropriations don't support the planned multi-year munitions buys, management said there are "make whole" provisions in the contracts to help Lockheed Martin avoid losses.

During the fourth quarter, the company's missiles business, maker of the Patriot system, posted the fastest sales growth, up 17.8% from a year ago.

Quarterly sales for its aeronautics segment, which is the leading segment by revenue and makes the F-35 jets, rose 6.4%.In January, Lockheed said it delivered a record 191 F-35 fighter jets in 2025, up from 110 jets in 2024.

Ukrainian soldiers being trained to use the Patriot anti-aircraft missile system. (via REUTERS)

The F-35 is the Pentagon's largest acquisition program, with lifetime costs estimated at more than $2 trillion for purchasing, operating and maintaining the aircraft.

Trump in January signed an order for defense firms linking dividends, share buybacks and executive pay to weapons delivery schedules, introducing uncertainty around capital returns.

Peers RTX and Northrop Grumman have reaffirmed their commitment to dividends, although Northrop said it would pause buybacks beyond January.In 2025, Lockheed paid $3.13 billion in dividends, a rise from $3.06 billion the previous year.

Lockheed forecast 2026 revenue of $77.5 billion to $80 billion, above analysts' estimates of $77.83 billion, according to LSEG-compiled data.It expects profit per share between $29.35 and $30.25, versus expectations of $29.28.