Lockheed Martin is down about 3% as investors react to a weaker-than-expected first-quarter 2026 print and a notable deterioration in cash generation. The company posted sales of $18.021 billion and diluted EPS of $6.44, down from $7.28 in the year-ago quarter, while free cash flow fell to negative $291 million (from positive $955 million last year), a combination that typically pressures defense primes that trade partly on cash conversion and capital return capacity. (news.lockheedmartin.com)

Beyond the headline EPS decline, the cash-flow reversal is the focal point. Lockheed reported cash from operations of $220 million versus $1.409 billion in the prior-year quarter, and attributed the decline primarily to higher working capital driven largely by billing timing. That dynamic raises questions about near-term cash conversion even as the company maintains longer-term free-cash-flow targets. (news.lockheedmartin.com)

The quarter also showed pressure in operating performance, with total business segment operating profit down year over year, tied to lower Aeronautics net profit booking rate adjustments and the absence of certain prior-year favorable items. Market chatter around production/program issues in Aeronautics has added to the cautious tone, reinforcing the view that execution risk—not demand—is what’s being repriced in the stock today. (news.lockheedmartin.com)

Lockheed reaffirmed its 2026 outlook, including sales of $77.5 billion to $80.0 billion, EPS of $29.35 to $30.25, and free cash flow of $6.5 billion to $6.8 billion, which could limit downside if investors regain confidence in cash normalization over the coming quarters. The next catalyst is whether management can demonstrate improved working-capital performance and steadier program execution while scaling production initiatives referenced in its quarter commentary. (news.lockheedmartin.com)