-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
LMT reported Q1 2026 sales of $18.0B (+0.3% Y/Y), missing consensus by 1.3%, as 8% Y/Y growth at Missiles and Fire Control (MFC) and Space (+7%) was offset by declines at Aeronautics (-1%) and Rotary and Mission Systems (-8%). GAAP EPS of $6.44 fell 11.5% Y/Y, missing consensus by $0.25, due to unfavorable profit adjustments on F-16 and C-130 programs totaling $180M. The results highlight ongoing execution risks on fixed-price contracts, though F-35 sustainment progress and MFC's strong performance in high-priority defense systems provide positive offsets. Management maintained full-year guidance targeting 5% sales growth and 25% segment operating profit growth despite weak Q1 performance. Operating cash flow declined 84% Y/Y to $220M, while free cash flow turned negative at -$291M, raising concerns about achieving $6.5-$6.8B full-year guidance. We believe Q2 will be pivotal in determining whether current headwinds reflect timing issues or more fundamental execution challenges that could pressure guidance.