Lockheed Martin (LMT) is trading lower as the market reacts to its first-quarter 2026 results released April 23, 2026. The company posted sales of $18.0 billion and diluted EPS of $6.44, which came in below many Street forecasts, and the bigger surprise was cash generation: free cash flow was a $291 million outflow versus a $955 million inflow in the year-ago quarter.

The cash flow reversal is amplifying the selloff. Lockheed Martin said cash from operations fell to $220 million from $1.4 billion a year earlier, driven largely by higher working capital tied to the timing of billing activities; free cash flow moved to negative territory for the quarter. Even with the weak quarter, the company 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.

Investors are likely to focus on whether cash flow normalizes in coming quarters as working-capital timing reverses and operational execution improves. The stock’s next catalyst is evidence that quarterly cash conversion rebounds while the company maintains its full-year targets, particularly as defense budget scrutiny and program execution risks can quickly pressure sentiment even when headline revenue is stable.