Lockheed Martin (LMT) Earnings Date & Reports
Lockheed Martin is the world's largest defense contractor and has dominated the Western market for high-end fighter aircraft since it won the F-35 Joint Strike Fighter program in 2001... Show more
LMT is expected to report earnings to rise 11.80% to $7.20 per share on July 28
Lockheed Martin (LMT) First Quarter 2026 Earnings Recap: EPS Misses Estimates Amid Cash Flow Slump
Key Takeaways
- Net sales reached $18.0 billion, up 0.3% year-over-year (YoY) from $18.0 billion but below consensus estimates of approximately $18.2 billion.
- Diluted EPS (earnings per share) was $6.44, down 11.5% YoY from $7.28 and missing analyst expectations around $6.7.
- Cash from operations fell sharply to $220 million from $1.4 billion YoY, with free cash flow (FCF) turning negative at -$291 million.
- Total backlog stood at $186.4 billion, down from $193.6 billion at year-end 2025.
- Company reaffirmed 2026 full-year guidance, including sales of $77.5-80.0 billion and EPS of $29.35-30.25.
- Shares declined about 5% in post-earnings trading due to the miss and weaker cash flow.
Earnings Context and Why It Matters
As the world's largest defense contractor, Lockheed Martin's quarterly results are closely watched by investors tracking U.S. military spending, geopolitical tensions, and demand for key programs like the F-35 fighter jet and missile systems. Q1 2026 results come amid ongoing global conflicts boosting munitions needs but also supply chain challenges and program delays in fixed-price contracts. Prior quarters showed resilient sales growth, but margin pressures from labor and materials have weighed on profitability. For investors, these earnings signal execution on a massive $186 billion backlog and potential for multiyear production ramps, influencing sector peers and DoD budget debates.
Lockheed Martin reported first quarter 2026 results for the period ended March 29, 2026. Net sales were $18.021 billion, a modest 0.3% increase from $17.963 billion in Q1 2025, driven by gains in Missiles and Fire Control (+8%) and Space (+7%), offset by declines in Rotary and Mission Systems (-8%) and Aeronautics (-1%). This topped prior-year levels but fell short of Wall Street's $18.2 billion consensus.
Business segment operating profit dropped 13% to $1.823 billion, reflecting higher costs and lower volumes in some areas. Net earnings declined 13.1% to $1.488 billion, yielding diluted EPS of $6.44—below expectations of about $6.7—due to margin contraction across segments like Space (-26%) and Rotary (-19%). Cash from operations plummeted to $220 million, with FCF at -$291 million, hit by working capital needs.
The company maintained its full-year 2026 outlook: sales $77.5-80.0 billion (up ~5% YoY), segment operating profit $8.425-8.675 billion (~25% growth), EPS $29.35-30.25, and FCF $6.5-6.8 billion. CEO Jim Taiclet noted strong demand and progress on munitions scaling via DoD agreements.
AI Screener
Tickeron’s AI Screener is an AI-powered stock and ETF discovery tool that helps traders and investors filter the market based on technical patterns, fundamentals, trends, volatility, and AI-driven signals. Users can scan thousands of stocks and ETFs using customizable filters such as industry, market capitalization, technical indicators, price patterns, and performance metrics. The screener identifies trade ideas, trending stocks, breakout candidates, and market opportunities more efficiently than manual screening. Explore it today to enhance your research process.
Market Reaction and Investor Sentiment
Lockheed Martin shares fell around 5% immediately after the April 23 release, extending a downtrend as investors focused on the EPS miss, profit decline, and negative FCF amid program delays in F-16 and C-130 production. Sentiment soured on margin pressures from fixed-price contracts and cash flow weakness, despite reaffirmed guidance and robust backlog. Analysts noted ongoing demand for missiles but flagged supply chain risks.
Forward Outlook and Key Factors to Monitor
Investors should track Lockheed Martin's execution against its reaffirmed 2026 guidance, particularly sales growth toward $80 billion and FCF recovery to $6.8 billion. Key will be ramping munitions production under new DoD frameworks for Patriot, THAAD, and PrSM systems, aiming for 3-4x current rates through supply chain and workforce investments.
Program-specific catalysts include F-35 deliveries, Orion space missions, and missile defense advancements amid global threats. Margin trends in Aeronautics and Space segments merit attention, as cost overruns in fixed-price deals pressured Q1 results. Broader DoD budgets, potential M&A (mergers and acquisitions), and geopolitical demand signals could shape the trajectory.
Cash flow normalization via backlog conversion ($186 billion) remains critical, with working capital management pivotal for H2 improvement. Industry dynamics like labor shortages and inflation will test operational resilience.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Advertisement
General Information
a manufacturer of components and systems for aerospace and defense use
Industry AerospaceDefense