Defense Stocks: Q2 Earnings Show Top- and Bottom-Line Growth

Defense stocks have exhibited a significant amount of volatility in 2026. After rising early in the year amid escalating geopolitical tensions, they have pulled back as a result of de-escalation efforts, dividend/buyback restrictions, and profit-taking.

Yet operational performance within the sector continues to be strong. Here’s a look at some Q2 earnings.

RTX Corp

For the second quarter¹ of 2026, RTX Corp – the owner of Raytheon – posted sales of $24.7 billion, up 14% year-over-year. Adjusted net income came in at $2.6 billion, up 22%, while adjusted earnings per share (EPS) was $1.89, up 21%.

Zooming in on its defense segment, Raytheon, it posted adjusted sales of $8.3 billion, up 18% versus the prior year. Growth here was driven by higher volume on land and air defense systems, naval programs, and air and space defense systems, including Patriot, and Advanced Medium-Range Air-to-Air Missile (AMRAAM).

At the end of the quarter, the group had a backlog of $289 billion – roughly 3.3 times 2025 sales. Breaking this down, $170 billion was commercial and $119 billion was defense-related.

On the back of this strong performance, the company raised its full-year guidance. It now expects adjusted sales of $95.0 to $96.0 billion, up from $92.5 to $93.5 billion and adjusted EPS of $7.10 to $7.25, up from $6.70 to $6.90.

Lockheed Martin

Lockheed Martin saw sales rise 11% year-over-year to $20.1 billion in the second quarter² thanks to increased volume and munition ramps. Net earnings were $1.8 billion, or $7.94 per share, compared to $342 million, or $1.46 per share, a year earlier.

During the quarter, the company received $65 billion of new orders. A highlight was the signing of a $35 billion multi-year contract with the Missile Defense Agency for the Terminal High Altitude Area Defense (THAAD) anti-ballistic missile defense system.

At the end of the quarter, Lockheed’s backlog was a record $230 billion. This represented roughly 3.2 times 2025 sales.

Like RTX Corp, the company raised its guidance for the full year. It now expects accelerated year‑over‑year sales growth of approximately 8% and free cash flow of over $7 billion.

GE Aerospace

For Q2, GE Aerospace³ posted adjusted revenue of $12.6 billion, up 24% year-over-year. Adjusted EPS came in at $2.02, up 22%.

Within its Defense & Propulsion Technologies (DPT) segment, revenue was $3.4 billion, up 16% year-over-year, with Defense & Systems revenue rising 12%. Orders amounted to $4.1 billion, up 12%.

During the quarter, the company registered several notable wins on the defense front including a deal with Turkish Aerospace for F404 engines to power its HÜRJET advanced jet trainer program and a deal with Leonardo Helicopters for CT7 engines to power the UK Ministry of Defence’s New Medium Helicopter program. It also secured a contract with the U.S. Air Force to mature the GE426 engine through preliminary design review to support its medium thrust class Autonomous Collaborative Platform.

Given this strong performance the company raised its full-year guidance across the board. It now expects high-teens revenue growth for the group and low double-digit growth for the DPT division.

The Case for Defense Stocks

Despite short-term share price volatility, the underlying fundamentals of the defense sector remain remarkably strong. As Q2 results from industry leaders like RTX Corp, Lockheed Martin, and GE Aerospace demonstrate, surging demand and record backlogs are driving robust top- and bottom-line growth and giving management the confidence to raise full-year guidance.

Given that many stocks within the defense space are well off their highs, now could be a good time to take a closer look at the sector. Not only does it offer the potential for capital growth, but it also offers a potential hedge against geopolitical uncertainty.

Footnotes:

¹RTX, RTX Reports Q2 2026 Results, as of July 23, 2026

²Lockheed Martin, Lockheed Martin Reports Second Quarter 2026 Financial Results, as of July 23, 2026

³GE Aerospace, GE Aerospace announces second quarter 2026 results, as of July 16, 2026