Lockheed Martin (LMT) investor relations material

Executive summary

• Q1 2026 sales were $18.0B, with net earnings of $1.5B ($6.44 per share), down from $1.7B ($7.28 per share) year-over-year; 69% of sales were to the U.S. Government and 31% international.

• Major contract wins included a $1.5B F-16 deal with Peru and multi-year agreements to accelerate munitions production, with Artemis II's Orion lunar mission reinforcing leadership in space.

• Demand for defense technologies and space systems remains high, with robust backlog at $186.4B and new investments in AI, robotics, and counter-UAS solutions.

• Operating profit and margins declined year-over-year due to unfavorable adjustments, higher costs, and lower profit booking rates.

• Free cash flow was negative $291M, impacted by working capital timing and ERP implementation; $816M in dividends paid and $1B in long-term debt retired.

Financial highlights

• Q1 2026 sales were $18.0B, nearly flat year-over-year, with consolidated operating profit down 13% to $2.06B and net earnings at $1.5B.

• Segment operating profit was $1.8B, with a margin of 10.1%; EPS was $6.44, down 12% year-over-year.

• Free cash flow was negative $291M, mainly due to higher working capital and software expenditures.

• Capital expenditures were $511M in Q1 2026; $816M in dividends paid and $1B in long-term debt repaid.

• Gross margin was 11.5%, and operating margin was 11.4%, both down from prior year.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: sales of $77.5B–$80.0B, operating profit of $8.4B–$8.7B, and free cash flow of $6.5B–$6.8B.

• Sales and operating profit growth of ~5% and 25% year-over-year anticipated; EPS forecasted at $29.35–$30.25.

• Margins expected to improve in the second half of 2026 as production milestones are achieved; segment operating margin outlook is 10.9%.

• Backlog at $186.4B, with 34% expected to convert to revenue in the next 12 months.