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 5.2% in premarket trading.
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, tariffs and increased expenses on fixed-price programs negotiated years ago.
First-quarter profit in Lockheed’s largest segment, aeronautics, was weighed down by production performance and development delays for its F-16 fighter jet as well as delays in its C-130 transport aircraft program as few suppliers are still making the parts it needs.
These delays led to Lockheed making “profit book rate adjustments” that reflect changes in cost and margin estimates over the lives of the programs.
Sales in the segment were also 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 19 other allied nations.
The Bethseda, Maryland-based company also 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.
It reported a first-quarter profit of $6.44 per share, compared with $7.28 last year. Total revenue for the quarter ended March 29 was $18 billion, roughly flat from a year ago.
The company maintained its 2026 sales forecast of $77.5 billion to $80 billion.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Devika Syamnath)
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