Lockheed Profit Plunges, Faces Tax Dispute and Risks

Lockheed Martin reported an 80% plunge in second-quarter profit, driven by over $1.6 billion in charges related to a troubled classified aeronautics program and international helicopter contracts, resulting in net income of $342 million compared to $1.64 billion a year earlier. The company missed revenue and profit expectations, with sales at $18.16 billion, slightly up year-over-year but below analyst forecasts. Lockheed lowered its 2025 profit outlook by $1.5 billion and slashed its full-year earnings guidance to $21.70–$22.00 per share from $27.00–$27.30, leading shares to fall over 8% for the day—their worst S&P 500 performance. Losses were worsened by cost overruns on pre-inflation fixed-price contracts, forcing the company to shoulder higher expenses. While Lockheed saw growth in its aeronautics and missile segments and affirmed its sales outlook, it faces ongoing risks, including a $4.6 billion tax dispute with U.S. authorities. The company continues to secure major defense contracts, such as a $1 billion U.S. Air Force missile deal, but remains under scrutiny regarding its management of legacy program risks and cost pressures.