Lockheed Martin reported flat revenue year-over-year for Q1 2026, with net earnings and EPS declining due to lower profit booking rate adjustments and the absence of favorable prior-year performance. While the company reaffirmed its full-year outlook, a significant drop in operating cash flow and free cash flow compared to the prior year raises concerns about working capital management and liquidity.
Reaffirmed 2026 financial outlook with anticipated sales and operating profit growth of approximately 5% and 25% year-over-year, respectively.
positiveSigned several framework agreements to accelerate and scale munitions production, including advanced Patriot Missile, THAAD, and PrSM, with anticipated production rate increases of 3-4 times current rates.
positiveSales at Missiles and Fire Control increased 8% YoY, driven by production ramp-up at integrated air and missile defense programs and tactical and strike missile programs.
positiveSales at Space increased 7% YoY, primarily attributable to higher sales volume for strategic and missile defense programs.
positiveNet earnings decreased to $1.5 billion ($6.44 per share) from $1.7 billion ($7.28 per share) in Q1 2025, a decline of 12.5% in net earnings and 11.5% in EPS.
negativeCash from operations significantly decreased to $220 million from $1.4 billion in Q1 2025, a drop of 84.3%.
negativeFree cash flow turned negative at $(291) million, compared to $955 million in Q1 2025, a decrease of $1.25 billion.
negativeTotal business segment operating profit decreased 13% YoY to $1.8 billion, primarily due to lower net profit booking rate adjustments at Aeronautics and the absence of favorable performance in prior year civil space and classified programs.
negativeAeronautics segment operating profit decreased 14% YoY to $619 million, with operating margin contracting from 10.2% to 8.9%, driven by unfavorable profit adjustments on F-16 and C-130 programs.
attentionRotary and Mission Systems segment operating profit decreased 19% YoY to $423 million, with operating margin contracting from 12.0% to 10.6%, due to lower volume and unfavorable profit adjustments on helicopter programs.
attentionSpace segment operating profit decreased 26% YoY to $281 million, with operating margin contracting from 11.8% to 8.2%, primarily due to the absence of favorable performance at completion on certain commercial civil space programs in the prior year.
attentionTotal backlog decreased to $186.4 billion from $193.6 billion at the end of 2025.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total |
|---|---|---|---|---|
Aeronautics | N/A | — | — | — |
Missiles and Fire Control | N/A | — | — | — |
Rotary and Mission Systems | N/A | — | — | — |
Space | N/A | — | — | — |
| Total Revenue | $0.00M | — | — | 100.0% |
Segment performance shows business unit health and growth drivers.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
Lockheed Martin’s superior capabilities in delivering advanced defense technology and systems and in space exploration have been proven again and again in 2026.
Pioneered commercially inspired, long term business arrangements with U.S. government leadership, signing framework agreements to accelerate and scale munitions production.
Anticipate these groundbreaking agreements will benefit both industry and the government and serve as the example for future contracting initiatives.
Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.
Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.