What did Lockheed Martin report for Q1 2026?

LMT missed on EPS (reported below the $6.73–$6.79 consensus), revenue (below $18.24B estimate), and — most critically — free cash flow turned deeply negative. The FCF miss was the primary driver of the stock's decline. Shares fell ~5% pre-market and closed at $530.55, down -4.48% on the day.

Why did LMT's free cash flow turn negative?

The deeply negative FCF reflects increased working capital tied to F-35 program deliveries, milestone payment timing, and elevated defense R&D spending. Lockheed is investing in classified programs and hypersonic/directed energy systems — front-loaded spending that pressures near-term FCF before contract milestone payments arrive. This pattern mirrors what NOC and RTX also showed in their Q1 prints.

Is this a defense sector problem or an LMT-specific issue?

Sector-wide. NOC fell -6.2%, RTX fell -3.8%, GE fell -5.8% last week. Now LMT -4.5%. All four have missed on cash generation. The market was pricing in Hormuz contract acceleration — the reality is that defense primes are burning cash on investment before new contract revenue flows. This is a timing issue, not a demand problem, but the tape is punishing it.

What does this mean for the signal engine's LMT score?

LMT's earningsProx resets to 1.0 post-print (>30 days to next report), which was expected to boost the combined score. However, the sector momentum component (sectorMom) for defense takes a hit from the Q1 miss. Net effect: LMT scores approximately 0.55 HOLD — improved from the pre-earnings 0.48 SELL, but not actionable while VIX 21+ and WTI $96+ suppressors are active.

How did Ray's signal engine handle LMT exposure?

Ray had no LMT position going into earnings — the signal engine never issued a BUY for LMT (oil and VIX suppressors kept scores below 0.65 throughout). LMT was tracked as HOLD/SELL territory. The defense premium (0.85) in the scoring model was offset by macro suppressors. Correct call: no position, no loss on the -4.5% print.

LMT Q1 2026 Earnings Recap

BMO April 23, 2026 | by Ray

The Miss

Lockheed Martin reported Q1 2026 results before the open on April 23.

Metric	Estimate	Result
EPS	$6.73–$6.79	Miss ❌
Revenue	~$18.24B	Miss ❌
Free Cash Flow	Positive expected	Deeply Negative ❌

Stock reaction: −5% pre-market → closed at $530.55 (−4.48%)

The FCF Problem

Free cash flow turning deeply negative is the headline shock. Defense primes trade on cash generation — when FCF goes negative, it signals:

Working capital buildup — milestone payments not yet received
Front-loaded R&D — hypersonics, classified programs, directed energy
F-35 delivery timing — program revenue lumpy by contract milestone

This is the same pattern that hit NOC, RTX, and GE this quarter. The Hormuz contract acceleration thesis was premature — the cash won’t flow until H2 2026 at earliest.

Sector Damage Scorecard

Company	Q1 Result	Stock Reaction
GE Aerospace	Miss	−5.8%
NOC	Miss	−6.2%
RTX	Miss	−3.8%
LMT	Miss + FCF−	−4.5%

Pattern: All four major defense primes disappointed in Q1 2026. The Hormuz premium has been unwound from sector valuations.

LMT Chart Context

Current: $530.55
52-week high: $692
Below high: 23.4% → meanRev = 1.0 (deep discount)
Prior close (Apr 22): $571.95
Pre-market low: ~$540

Signal Engine Assessment

Post-print LMT combined score: ~0.55 HOLD

Signal	Value	Note
earningsProx	1.0	Reset — >30 days to next
sectorMom	0.55	Revised down from 0.65 (sector miss)
defensePrem	0.85	Unchanged
oilFilter	0.30	WTI $96.47 — suppressor active
vixTrend	0.10	VIX 21.17 — full suppressor

Not actionable until macro suppressors lift. Watch for: VIX below 18 + WTI below $85 = potential LMT BUY setup (FCF normalization + Hormuz contract flow = H2 catalyst).

Bottom Line

LMT Q1 was a miss across the board. The FCF turn negative was the shock. Defense sector re-rating is complete — all major primes have now printed weak Q1s. The thesis is delayed, not broken: Hormuz + Ukraine + Taiwan spending will flow through H2. For now: HOLD, not BUY.

LMT Q1 2026 Earnings Recap: EPS Miss, Revenue Miss, Free Cash Flow Deeply Negative