Quarterly report

Summary

• Second quarter 2026 sales rose $525 million, or 5 percent, to $10,876 million, with a 13 percent increase at Aeronautics Systems, while net earnings fell $80 million, or 7 percent, to $1,094 million.
• Operating income declined $329 million, or 23 percent, to $1,096 million, primarily because the prior year included a $231 million gain on the training services divestiture.
• Space Systems recorded a $91 million unfavorable EAC adjustment on the GEM 63XL program in the second quarter related to increases in projected cost and material quantity, following a $71 million unfavorable adjustment in the first quarter tied to a solid rocket motor anomaly during a Q1 2026 launch.
• Total backlog was $104.7 billion as of June 30, 2026, up 9 percent from year-end, including $7.6 billion of new Sentinel awards and $4.3 billion for restricted programs.
• On the B-21 program, cumulative recognized losses total approximately $2.0 billion, with a remaining loss accrual of $1.0 billion, and the company continues to expect to invest approximately $2.5 billion to expand production capacity.
• The company increased its quarterly dividend 7 percent to $2.47 per share in May 2026 and had $2.5 billion of share repurchase authorization remaining as of June 30, 2026.

Why it mattersSpace Systems margin fell to 8.6 percent on GEM 63XL cost growth tied to a launch anomaly, while B-21 production expansion and a $7.6 billion Sentinel award reshaped backlog. The disclosures update program cost estimates that affect solid rocket motor and strategic deterrence work.