A lawsuit against defense contractor Lockheed Martin Corp. alleges that the company misled investors by downplaying risks in its government contracts and overstating its ability to deliver on time.
Investor Muhammad Khan filed the suit July 28 in the U.S. District Court for the Southern District of New York, alleging the company made false or misleading statements that led to significant losses for investors between Jan. 23, 2024, and July 21, 2025. The suit accuses top current and former Lockheed executives of violating the Securities Exchange Act of 1934.
In a statement, a Lockheed Martin spokesperson said, “The company is aware of the class-action shareholder lawsuit, and we intend to defend ourselves vigorously.”
The Bethesda, Maryland-based company owns Fort Worth-based Lockheed Martin Aeronautics Co., which assembles the F-35 stealth fighter aircraft at Naval Air Station Joint Reserve Base Fort Worth. The aeronautics division is set to deliver 170 to 190 F-35s in 2025, company executives said in during a second-quarter earnings call on July 22.
Lockheed Martin recognized $1.8 billion in losses during the second quarter of this year. The losses include a $950 million charge on a classified program involving its Skunk Works division, which has a Fort Worth office.
The company also faces a $4.6 billion additional income tax liability from the IRS related to an accounting method change and is accruing $100 million in interest as it contests the claim.
Lockheed Martin CEO Jim Taiclet said during the earnings call that issues with the F-35’s Technology Refresh 3 upgrade paused deliveries for a year. With that issue resolved, Lockheed Martin Aeronautics has delivered 207 aircraft since 2024, Taiclet said.
More orders for F-35 aircraft are expected from the United Kingdom, Belgium and Denmark in addition to boosted U.S. government orders.
The lawsuit against Lockheed Martin alleges that the company lacked effective internal controls regarding its risk-adjusted contracts, lacked effective procedures to review program requirements, schedule and risks, and overstated its ability to deliver on commitments.
Lockheed Martin announced on Oct. 22, 2024, that the company was forced to recognize $80 million in losses on the classified aeronautics program “due to higher than anticipated costs to achieve program objectives” as well as a loss in its rotary and mission systems segment.
“On this news, the price of Lockheed Martin stock fell more than 6%,” according to the lawsuit.
On Jan. 28, 2025, Lockheed Martin recorded pre-tax losses of $1.7 billion associated with classified aeronautics and missile businesses, prompting the company stock to fall more than 9%, according to the suit.
During the second-quarter earnings call in July, Lockheed Martin disclosed billions in losses, including the classified program due to “design, integration, and test challenges, as well as other performance issues,” the suit said. The company also noted about $570 million in losses on its Canadian maritime helicopter program. Lockheed Martin stock fell near 11% after the disclosures, the suit alleged.
Eric E. Garcia is a senior business reporter at the Fort Worth Report. Contact him at eric.garcia@fortworthreport.org.
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