Lockheed Martin's stock plummeted 8.57% in intraday trading on Tuesday after the defense giant reported a massive earnings miss and slashed its full-year outlook. The company disclosed $1.6 billion in pre-tax losses, primarily tied to a classified program in its Aeronautics segment, leading to second-quarter earnings per share of just $1.46 compared to analysts' expectations of $6.57.

The disappointing results prompted Lockheed to cut its 2025 earnings guidance to $21.70-$22.00 per share, down sharply from its previous forecast of $27.00-$27.30. While reaffirming its sales and free cash flow outlook, the revised earnings projection signals ongoing challenges with cost overruns and performance issues in some of the company's major legacy programs. This marks the second time in recent quarters that Lockheed has taken significant charges related to classified programs, following a $1.7 billion hit in Q4 2024.

Investors were particularly rattled by CEO Jim Taiclet's comments that the company's "ongoing program review process identified new developments that caused us to re-evaluate the financial position on a set of major legacy programs." The persistent issues with high-profile contracts, combined with concerns about shifting defense priorities toward unmanned systems, have shaken confidence in Lockheed's near-term outlook. While the company highlighted some positive developments, including new F-35 orders and over $1 billion in missile contracts, the magnitude of the earnings miss and guidance cut overshadowed these wins in Tuesday's trading session.