Lockheed Martin and Boeing have entered into a seven‑year framework agreement with the U.S. Department of Defense that will triple the production capacity of Patriot Advanced Capability‑3 Missile Segment Enhancement (PAC‑3 MSE) seekers and interceptors. Under the deal, Lockheed Martin’s annual missile production will rise from 600 to 2,000 units, while Boeing will scale its seeker output to meet the new demand.
The agreement delineates distinct responsibilities: Lockheed Martin is the prime contractor for the PAC‑3 MSE interceptor missile, and Boeing supplies the seekers. Boeing has invested more than $200 million since 2024 to expand seeker production in Huntsville, Alabama, where it already produced a record 500+ seekers in 2024. The combined effort will enable the U.S. and its allies to replenish inventories and respond to emerging threats such as ballistic missiles, hypersonics, and drones.
Lockheed Martin’s Missiles and Fire Control (MFC) segment posted a 382% jump in operating profit in Q4 2025, rising to $535 million from a $804 million loss in Q4 2024. The full‑year 2025 operating profit reached $1,989 million, up from $413 million in 2024. The surge is largely attributable to the absence of large reach‑forward losses that were recorded in Q4 2024, which had previously depressed profitability.
The contract is part of the Department of War’s “Arsenal of Freedom” initiative and the Acquisition Transformation Strategy, which aim to strengthen the defense industrial base by engaging suppliers directly and providing long‑term demand signals. By securing a stable, multi‑year production agreement, Lockheed Martin and Boeing are positioned to invest in tooling, workforce development, and supply‑chain resilience.
"We appreciate the Department of War's leadership in advancing acquisition reform. This first‑of‑its‑kind approach builds on years of advocacy and collaboration to bring commercial practices to major acquisition programs. We will create unprecedented capacity for PAC‑3 MSE production, delivering at the speed our nation and allies demand while providing value for taxpayers and our shareholders," said Jim Taiclet, Lockheed Martin Chairman, President and CEO.
"This agreement paves the way for us to scale rapidly to deliver increasingly sophisticated seekers. In 2025, we increased deliveries by over 30% and we're excited for the opportunity to grow our highly skilled workforce and our presence in Huntsville as we now triple production," said Bob Ciesla, Vice President, Boeing Precision Engagement Systems.
"To build a true Arsenal of Freedom, we must strengthen every link in the chain. This agreement with Boeing is a direct reflection that speed, volume, and a resilient supply chain are paramount. We are moving beyond the old model and forging direct partnerships with critical suppliers to ensure the entire defense industrial base is postured to expand production and deliver the decisive capabilities our warfighters need at speed and scale," said Michael Duffey, Under Secretary of War for Acquisition and Sustainment.
The agreement not only secures a durable revenue stream for Lockheed Martin but also reinforces its position as the primary supplier of advanced missile defense systems. The coordinated expansion of missile and seeker production will enable the U.S. to maintain a credible deterrent and support allies in a landscape marked by heightened geopolitical tensions and evolving threats.
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