July 22 – Lockheed Martin (NYSE:LMT) shares fell more than 6% Tuesday after the defense contractor reported an 80% plunge in second-quarter profit. This profit decline was due to the $1.6 billion pretax charge tied to a classified Aeronautics program.
Net income dropped to $342 million, or $1.46 per share, compared with $1.64 billion, or $6.85 per share, a year earlier. The company also cut its 2025 operating profit outlook by $1.5 billion to $6.65 billion.
The charge included $950 million related to the undisclosed program and $570 million connected to issues with Canada’s CH-148 Cyclone helicopter deal. Lockheed said it is in discussions with the Canadian government to amend contract terms.
Adjusted earnings came in at $7.29 per share, topping analysts’ average estimate of $6.44, according to LSEG. However, revenue missed forecasts, coming in at $18.16 billion versus the $18.57 billion consensus.
Lockheed mentioned elevated expenses on fixed-price contracts, numerous entered into prior to the post-pandemic rise in labour and materials costs. The company added inflation and a persistent lack of supply chain availability is straining long-term defense systems.
This article first appeared on GuruFocus.
