Aeronautics revenue rose 17%, while Space Systems recorded a $71M charge. B-21 capacity was planned to rise 25%, supported by $4.5B of government funding and $2.5B of company investment. Management withdrew its prior roughly $4B 2028 free-cash-flow target.
[AS-055]2026 sales, operating income and FCF were held, but capex rose $200M to about $1.85B and the 2028 FCF target was removed.
[AS-055]Near-term operating guidance stayed intact, while a larger investment cycle delayed the medium-term cash inflection.
[AS-055]The 7% decline reflected reduced confidence in the timing and visibility of free cash flow rather than weak demand.
[MKT-001]Aeronautics revenue rose 17%, while Space Systems recorded a $71M charge. B-21 capacity was planned to rise 25%, supported by $4.5B of government funding and $2.5B of company investment. Management withdrew its prior roughly $4B 2028 free-cash-flow target.
Aeronautics revenue rose 17%, while Space Systems recorded a $71M charge.
B-21 capacity was planned to rise 25%, supported by $4.5B of government funding and $2.5B of company investment.
Management withdrew its prior roughly $4B 2028 free-cash-flow target.
2026 sales, operating income and FCF were held, but capex rose $200M to about $1.85B and the 2028 FCF target was removed.
| Metric | Prior | Latest | Consensus | Delta | Status | Reason / implication |
|---|---|---|---|---|---|---|
| 2026 sales | $43.5–44.0B | $43.5–44.0B | Not consistently available | No change | Reiterated | BacklogProduction growth intact |
| 2026 segment operating income | Existing range | Reiterated | Not consistently available | No change | Reiterated | Program mixCharges absorbed within plan |
| 2026 free cash flow | $3.1–3.5B | $3.1–3.5B | Not consistently available | No change | Reiterated | Cash timingStill achievable but capex-heavy |
| 2026 capex | Approximately $1.65B | Approximately $1.85B | Not consistently available | +$200M | Raised | B-21 capacityReduces near-term FCF |
| 2028 free cash flow | Approximately $4B target | Target withdrawn | Not applicable | Removed | Withdrawn | Investment scope and timingMedium-term visibility reduced |
The environment supported sales and backlog but raised capex and reduced visibility on out-year free cash flow. The affected KPIs were Aeronautics growth, Defense Systems growth, capex and FCF.
Near-term operating guidance stayed intact, while a larger investment cycle delayed the medium-term cash inflection.
The 7% decline reflected reduced confidence in the timing and visibility of free cash flow rather than weak demand.
The roughly 7% first-day decline persisted.
| Window | Stock | vs benchmark | vs peers |
|---|---|---|---|
| 1D | -7.0% | -6.3% | -5.2% |
| 2D | -10.3% | -10.7% | -6.3% |
| 5D | -12.4% | -13.3% | -3.6% |
Defense demand firmed, but the B-21 opportunity crystallized into a company-funded capacity obligation that pushed cash returns outward.
Q1'26: agreement finalized to lift annual rate 25%, backed by customer reconciliation funds plus ~$2.5bn company-funded investment, primarily new facilities.
Q1'26: agreement to accelerate toward Milestone B later in 2026, first flight 2027, IOC early 2030s; prototype launch silo tube broke ground.
Q1'26: heightened Middle East urgency for IBCS, G/ATOR and Counter-UAS; robust European demand to buy US products.
Q1'26: tactical SRM capacity doubled since 2021, further 50% expansion (effectively tripling) at ABL West Virginia by early 2027; second-source qualification on PAC-3.
Q1'26: helping suppliers resource their own scaling; training workforce for F-35 radar ramp and F/A-XX readiness.
Q1'26: NOC and suppliers "prepared to bring the workforce and infrastructure needed to execute"; Navy affirmed August award timing.
Q1'26: shift toward OTAs and nontraditional mechanisms; incentives on contracts to drive early delivery, balancing affordability.
Consensus snapshots are reconstructed from contemporaneous broker notes; the flattened AlphaSense export does not preserve stable document URLs.
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