Defense Earnings Show Readiness Now and Modernization Ahead

Summary

Several of the nation's top defense contractors reported earnings amid a backdrop of the U.S. conflict with Iran appearing to be heading into a new phase. Meanwhile, on Capitol Hill, lawmakers are trying to secure funding to address the military's immediate needs while still grappling with the Trump administration’s longer-term goal of modernizing the military. This gives investors two stories to consider. Lockheed Martin NYSE: LMT, Northrop Grumman NYSE: NOC, and RTX Corporation NYSE: RTX all posted strong quarters this week. But the numbers only tell half of the story.Get Northrop Grumman alerts:Sign Up One story focuses on readiness right now, as the Strait of Hormuz remains a flashpoint and U.S. forces remain engaged with Iran. The other is about modernization, the decade-long buildout of next-generation aircraft, interceptors, and autonomous systems. Investors watching this earnings season need to weigh both. A company can look strong on paper while still being weighted toward one side of the story. Here's why investors can trust these three defense contractors for either scenario. Lockheed, Northrop, and RTX Build Record Backlogs After EarningsLockheed Martin TodayLMTLockheed Martin$582.73 +14.14 (+2.49%) As of 07/24/2026 03:59 PM Eastern52-Week Range$412.55▼$692.00Dividend Yield2.37%P/E Ratio21.48Price Target$624.94All three contractors delivered the kind of quarter that makes a bull case easy to write. Lockheed Martin posted $20.1 billion in sales and $7.94 in earnings per share (EPS). Its book-to-bill ratio hit 3.2x, indicating that new orders outpaced shipments by more than three to one. Backlog reached $230 billion, and management raised full-year sales guidance to $79.75–$81.75 billion. Northrop Grumman leaned even harder on its backlog story. The company reported a record $105 billion backlog, up 17% year over year, alongside $10.9 billion in quarterly sales. Reported EPS fell 6% to $7.68, but that decline was purely an accounting artifact tied to last ...