Defense Stocks: RTX, GE & Lockheed Martin Raise Guidance

Defense stocks have underperformed in recent months. This underperformance has stemmed from several pressures, including political uncertainty ahead of the US midterm elections, rising oil prices, and elevated borrowing costs.

Yet looking at recent earnings reports from RTX Corp, GE Aerospace, and Lockheed Martin, demand remains structurally strong across the industry. Here’s a concise overview of how these three defense heavyweights performed in Q3.

RTX Corp

For the third quarter of 2026¹, Raytheon owner RTX Corp posted revenue of $25.0 billion, up 11% year-over-year (YoY) and ahead of the consensus estimates of $24.1 billion². Sales in its Raytheon segment amounted to $8.0 billion, up 14%.

Adjusted earnings per share (EPS) came in at $2.26, up 33% YoY. Analysts had been expecting $1.78 here so this was a significant bottom-line beat.

On the back of this performance, the company raised its guidance for 2026. It now expects adjusted sales of $97.0 to $97.5 billion, versus previous guidance of $95.0 to $96.0 billion, and adjusted EPS of $7.65 to $7.75, up from $7.10 to $7.25.

Notably, the company had a $340 billion backlog at the end of Q3. Breaking this down, $176 billion was commercial and $164 billion was defense.

GE Aerospace

Turning to GE Aerospace – which manufactures engines for a broad range of military aircraft – it generated adjusted revenue of $13.3 billion for the third quarter³. This was up 18% YoY and ahead of the consensus forecast of $12.9 billion⁴.

Adjusted EPS came in $2.25, up 36% YoY. This was well ahead of the consensus estimate of $2.00.

Zooming in on the company’s Defense & Propulsion Technologies (DPT) segment, orders here were up 18% YoY in Q3 to $4.3 billion. During the quarter, the company advanced key defense programs, including the GEK800 (F143) engine with Kratos – which has been selected as a second-source propulsion system for the Joint Air-to-Surface Standoff Missile (JASSM) – and the XA102 adaptive-cycle engine for the U.S. Air Force’s Next Generation Adaptive Propulsion (NGAP) program.

Like RTX, GE raised its full-year guidance. It now expects adjusted revenue growth of 19-20% for the year versus previous guidance of “high teens,” and EPS of $8.00 to $8.10 versus previous guidance of $7.65 to $7.85.

Lockheed Martin

Lockheed Martin posted sales of $20.7 billion for Q3⁵, up 11% YoY and ahead of the consensus forecast of $20.5 billion⁶. This growth was driven by strong growth in its missiles unit on higher PAC-3 and THAAD production and a solid increase in aeronautics revenue from F-35 and C-130 programs.

Net earnings for the quarter were $1.8 billion, or $7.97 per share, compared to $1.6 billion, or $6.95 per share a year earlier. Analysts had been expecting EPS of $7.43.

As a result of this performance, Lockheed raised its guidance for 2026 (for the second consecutive quarter). It now expects sales of $80 to $82 billion, up from a prior forecast of $79.75 to $81.75 billion, and diluted EPS of $30.35 to $30.75 versus previous guidance of $29.95 to $30.65.

At the end of the quarter, the company had a record backlog of $292.0 billion (up 27% on Q2). This included $52.5 billion associated with the multi-year award to produce PAC-3 Missile Segment Enhancement (MSE) interceptors.

Is There an Opportunity in Defense Stocks Today?

In summary, while defense stocks are under pressure at present due to macroeconomic headwinds and political jitters, fundamental performance across the industry tells a different story. Strong Q3 beats, upwardly revised full-year guidance, and record-high backlogs suggest that global demand remains exceptionally resilient.

This disconnect between short-term share price underperformance and multi-year fundamental strength may have created a compelling entry point for investors. Today, defense stocks offer investors a rare combination of robust earnings visibility, pricing power, and long-term capital growth potential.

Footnotes:

¹RTX, RTX Reports Q3 2026 Results, as of October 20, 2026

²Reuters, RTX Corporation reports results for the quarter ended September 30 - Earnings Summary

³GE Aerospace, GE AEROSPACE ANNOUNCES THIRD QUARTER 2026 RESULTS, as of October 20, 2026

⁴Reuters, GE Aerospace Q3 adjusted revenue beats on strong demand; lifts 2026 outlook, as of October 20, 2026

⁵Lockheed Martin, Lockheed Martin Reports Third Quarter 2026 Financial Results, as of October 22, 2026

⁶Reuters, Brief: Lockheed Martin Expects FY Sales Of About $80 Bln To $82 Bln, as of October 22, 2026.

Diversification does not eliminate risk.