Lockheed Martin Corp (NYSE:LMT) Q2 Earnings Miss Estimates, Stock Plunges 6.7% on Profitability Concerns

LOCKHEED MARTIN CORP (NYSE:LMT) reported second-quarter earnings that fell significantly short of analyst expectations, triggering a sharp pre-market decline of nearly 6.7%. The defense contractor posted revenue of $18.16 billion, flat year-over-year and below the consensus estimate of $18.81 billion. Earnings per share (EPS) of $1.46—down from $6.85 in Q2 2024—missed estimates by a wide margin, coming in 77.3% below the projected $6.60.

Key Takeaways from the Earnings Report

• Revenue Stagnation: Sales remained virtually unchanged at $18.2 billion, missing expectations by approximately $650 million.
• Profitability Hit: Net earnings plunged to $342 million from $1.6 billion in the prior-year quarter, largely due to $1.6 billion in program losses and $169 million in other charges.
• Cash Flow Deterioration: Operating cash flow dropped to $201 million from $1.9 billion a year ago, while free cash flow turned negative at $(150) million compared to $1.5 billion in Q2 2024.
• Outlook: The company’s full-year revenue guidance of $74.25 billion (midpoint) aligns closely with analysts' estimates of $75.15 billion, but the weak Q2 performance raises execution concerns.

Market Reaction

The stock’s pre-market slump reflects investor disappointment over the earnings miss, particularly the steep decline in profitability. Lockheed’s underperformance contrasts with broader market trends, where defense peers like Northrop Grumman have raised their outlooks. The $1.6 billion in program losses—likely tied to contract delays or cost overruns—appears to be the primary drag, overshadowing the company’s reaffirmed full-year sales forecast.

Looking Ahead

Analysts expect Q3 revenue of $18.59 billion and EPS of $6.69, but Lockheed’s ability to rebound will depend on resolving the issues behind its recent charges. While geopolitical tensions continue to drive defense spending, execution risks remain a near-term headwind.

For detailed earnings estimates and historical performance, see Lockheed Martin’s earnings data.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.