Lockheed Martin Q2 Results: Defence equipment maker's net profit tanks 80%, revenue down to $18.16 billion

Mint

5 days ago

July 22 (Reuters) - Lockheed Martin reported on Tuesday that its second-quarter profit plunged by about 80%, after the U.S. defense group recorded a pretax loss of $1.6 billion, mainly linked to a classified program within its Aeronautics segment.
The company's shares fell 7.9% in premarket trading as the company also trimmed its 2025 profit estimate by $1.5 billion or 18% and said it now targets $6.65 billion in operating profit for the year.
This new guidance, revised down since the company's last estimate in April, did not include potential impacts from tariffs which have impacted other defense companies with international customers.
"Overall, the company's foundation remains solid and resilient," Chief Executive Jim Taiclet said in the company's earnings statement.
Net income fell to $342 million, or $1.46 per share, compared with $1.64 billion, or $6.85 per share, a year earlier. Lockheed said the charge stemmed from difficulties with a classified program in its Aeronautics business and several international helicopter programs in its Sikorsky unit.
Defense contractors are grappling with mounting cost pressures as inflation and supply chain disruptions drive up expenses on long-term programs priced years ago.
Many of these contracts — often fixed-price — were negotiated before the post-pandemic surge in labor, material, and component costs, forcing contractors such as Lockheed to absorb overruns.
Apart from the $950 million charge on the classified program, Lockheed took a $570 million hit on its work for the Canadian government relating to the procurement of its CH-148 Cyclone maritime helicopters.
"The company is in ongoing discussions with the customer regarding a potential restructure to certain contractual terms and conditions and to expand the scope of work that would be beneficial to both parties," Lockheed said of the program.
Excluding these charges, however, the group posted an adjusted profit of $7.29 per share, beating an average estimate of $6.44 per share according to data compiled by LSEG.
Lockheed missed Wall Street estimates for second-quarter revenue, which came in at $18.16 billion, compared with an average expectation of $18.57 billion. (Reporting by Utkarsh Shetti in Bengaluru and Mike Stone in Washington; Editing by Tasim Zahid and David Holmes)