LMT · 10-Q · 2026Q3 · Full report

Contract Profit Adjustments

LOCKHEED MARTIN CORP · 2026-10-22 · Importance 34 · Surprise 42

During the nine months ended September 27, 2026, Aeronautics recorded unfavorable profit adjustments of $170 million on F-16 and $175 million on C-130, while RMS recorded $125 million on Heavy Lift and $95 million on Seahawk. The F-16 adjustments reflected production performance and development delays, and C-130 adjustments reflected diminishing manufacturing-source integration challenges and delivery delays. In the quarter, Aeronautics recorded $40 million of unfavorable adjustments on each of F-16 and C-130; RMS had a $40 million favorable adjustment from resolution of a contracting matter, offset by $45 million of unfavorable Heavy Lift and Seahawk adjustments.

Key facts

• During the nine months ended September 28, 2025, Lockheed Martin recorded losses of $950 million on an ongoing classified Aeronautics program, $570 million on RMS’s CMHP, and $95 million on RMS’s TUHP, plus $105 million of unfavorable C-130 adjustments. source
• During the nine months ended September 27, 2026, Lockheed Martin recorded $170 million of unfavorable F-16 adjustments for production performance and development delays, and $175 million of unfavorable C-130 adjustments for diminishing manufacturing-source integration challenges and delivery delays. source
• During the nine months ended September 27, 2026, Lockheed Martin recorded unfavorable profit adjustments of $125 million on Heavy Lift and $95 million on Seahawk for production performance and schedule delays. source
• During the nine months ended September 28, 2025, Lockheed Martin recorded $130 million of favorable completion adjustments on certain commercial civil space programs and $80 million on a classified Aeronautics program. source
• Quarterly RMS operating profit increased $18 million, or 4%, primarily due to a $40 million favorable adjustment resolving a contracting matter, offset by $45 million of unfavorable Heavy Lift and Seahawk adjustments. source
• There are programs in the Aeronautics, MFC, and RMS segments with risk of additional losses. source