First-quarter earnings released this week by Lockheed Martin, Northrop Grumman, RTX Corporation, and Boeing showed only modest growth, with supply chain disruptions and production delays continuing to weigh on the sector.
Geopolitical tensions including the conflict involving the United States and Israel against Iran, as well as the war between Russia and Ukraine have driven a sharp rise in demand for American defence firms, as the Pentagon moves quickly to rebuild its weapons and aircraft stockpiles.
However, first-quarter earnings released this week by Lockheed Martin, Northrop Grumman, RTX Corporation, and Boeing showed only modest growth, with supply chain disruptions and production delays continuing to weigh on the sector.
Lockheed Martin, which reported its results on Thursday, missed analysts’ expectations, posting a drop in first-quarter profit.
Net earnings for the first quarter of 2026 stood at $1.5 billion, down from $1.7 billion during the same period in 2025.
The Bethesda-based defence giant said its aeronautics division was affected by delays in the development of its F-16 fighter jets, linked to flight testing challenges, while supply chain pressures also impacted production of its C-130 transport aircraft.
“The combined cost of the rework and schedule extension has been factored into our programme estimates,” a company executive said during the earnings call.
Sales also declined, as activity on classified programmes slowed, reducing revenue by $325 million compared to the previous quarter.
Still, this was partly offset by increased sales of F-35 fighter jets.
Meanwhile, the administration of Donald Trump has proposed purchasing 85 additional F-35 jets in 2027.
“We’re not surprised, given management’s intention to align closely with customer priorities,” said Seth Seifman, an analyst at JPMorgan.
Shares of Lockheed Martin fell sharply in midday trading, dropping 5.1 percent after markets opened on Thursday, and declining more than 12 percent over the past five days.
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