Lockheed Martin Corp (NYSE:LMT) reported lower quarterly profit and negative free cash flow in its first quarter of fiscal 2026, as delays in key aircraft programs weighed on results despite steady demand across its defense portfolio.
The company posted net earnings of $1.5 billion, or $6.44 per share, down from $1.7 billion a year earlier. Revenue totaled $18 billion, slightly below analyst expectations.
Cash from operations came in at $220 million, while free cash flow swung to a negative $291 million, marking a notable weakness in the quarter’s financial performance.
Management attributed part of the softness to timing issues and production delays in the F-16 fighter jet and C-130 transport aircraft programs. These headwinds offset otherwise solid execution in its core defense and space businesses.
CEO Jim Taiclet highlighted continued strength in Lockheed Martin’s strategic programs, including the F-35 and F-22 fighter jets, missile defense systems such as Aegis, THAAD, and Patriot interceptors, and the Orion spacecraft, which successfully completed NASA’s Artemis II mission.
Taiclet also pointed to new framework agreements signed during the quarter aimed at expanding production of key munitions, including Patriot missiles, THAAD, and the Precision Strike Missile (PrSM), which are expected to provide stronger demand visibility and support significant increases in production capacity, potentially raising output by three to four times current levels over time.
Despite the weaker cash flow, the company reaffirmed its full-year 2026 guidance. It continues to expect sales of $77.5 billion to $80 billion, earnings per share of $29.35 to $30.25, and free cash flow between $6.5 billion and $6.8 billion.
Segment operating profit for the quarter was $1.8 billion, supported by strong backlog levels and continued demand from US and allied defense customers.
However, investors focused on the cash flow miss and program delays, sending Lockheed Martin shares down nearly 4.5% in early trading following the results.