Lockheed Martin won a U.S. Army contract of up to $1.2 billion to produce its Precision Strike Missile Increment 2; the final value depends on orders. A second successful August flight test showed the missile could engage moving maritime targets.
The award is an indefinite-delivery, indefinite-quantity contract covering initial procurement, future orders, follow-on production and continued development. In March, Lockheed signed a seven-year agreement to raise annual PrSM production capacity to 550 missiles, after an Army contract worth $4.94 billion was awarded in 2025.
In Q2 2026, Lockheed’s Missiles and Fire Control segment posted $4.1 billion in sales, up 19% year over year, and $594 million in operating profit, up 24%. Management attributed about $100 million of the sales increase to tactical and strike missile production ramps, including PrSM. The segment’s backlog reached $87.9 billion by June 28, versus $46.7 billion at 2025 year-end, helping lift companywide backlog to a record $230.4 billion. Lockheed is also ramping PAC-3 and THAAD, pressuring manufacturing capacity and the supply chain; delays, supplier constraints or cost overruns could limit the benefit.
