Lockheed Martin quarterly profit falls as production delays weigh

By Mike Stone and Aishwarya Jain

April 23 (Reuters) – Lockheed Martin reported a lower first-quarter profit on Thursday, as high costs on fixed-price contracts and production slowdowns on some programs undercut the defense giant’s ability to cash in on soaring demand.

Shares of the company fell 4% in morning trading in New York.

A wave of global conflicts, including the ongoing Iran war, have prompted the Pentagon to replenish defense inventories, driving a surge in demand for missiles, munitions and combat aircraft.

However, Lockheed has been grappling with cost pressures from inflation and tariffs as supply-chain constraints increase expenses on fixed-price programs negotiated years ago.

First-quarter profit in Lockheed’s largest segment, aeronautics, was weighed down by development delays for its F-16 fighter jet, after running into issues during a flight test as part of its Taiwan and Morocco production ramp up.

“The combined cost of the rework and schedule extension ran through our program estimate,” an executive said on Lockheed’s earnings call.

Aeronautics profit was also hurt by delays in its C-130 transport aircraft program as few suppliers are still making the parts it needs. Sales in the segment were lower by $325 million due to reduced volumes on classified programs, the company said.

These decreases were partially offset by higher sales for its marquee F-35 fighter jets, which are supplied to the U.S. and other allied nations.

While F-35 procurement stood at just 47 aircraft in 2026, the administration is proposing to buy 85 of the jets in 2027, a 26% increase that returns to past Pentagon purchasing levels.

“Demand from the U.S. government is solidified, and interest in the airplane from our allied customers is also heightened,” the company said on the call.

The Bethesda, Maryland-based company posted a drop of 8% in quarterly sales in its rotary and mission systems business due to lower volume in radar programs and its Sikorsky helicopter programs.

Lockheed faced similar supply chain challenges last year and recorded a $1.6 billion charge in July 2025, linked to a classified program within its Aeronautics segment and international helicopter programs in its Sikorsky unit.

This is also the first quarter in many years that Lockheed has not repurchased shares as the administration increased pressure on defense contractors to prioritize production over shareholder payouts.

“We aren’t surprised, given management’s desire to be aligned with the customer’s agenda,” said Seth Seifman, an analyst at JP Morgan.

Lockheed reported first-quarter profit of $6.44 per share, compared with analysts’ estimates of $6.72, according to LSEG-compiled data.

Total revenue for the quarter ended March 29 was $18 billion, roughly flat from a year ago and lower than the $18.24 billion expected by analysts.

The company maintained its 2026 sales forecast of $77.5 billion to $80 billion.

(Reporting by Aishwarya Jain in Bengaluru and Mike Stone in Washington; Editing by Devika Syamnath abd Franklin Paul)