Shares of Lockheed Martin Corp. (LMT) plunged around 5% in premarket trading on Tuesday as the defense giant reported disappointing fourth-quarter 2024 results and provided a weak outlook for fiscal year 2025, primarily due to challenges related to its F-35 fighter jet program.

In the fourth quarter, Lockheed Martin's earnings per share (EPS) came in at $2.22, significantly lower than analysts' estimates of $6.64. The company's revenue of $18.6 billion also marginally missed expectations of $18.9 billion. These misses were primarily attributed to pre-tax losses of $1.7 billion associated with classified programs, impacting EPS by $5.45.

For fiscal year 2025, Lockheed Martin projected EPS in the range of $27.00-$27.30, below analysts' consensus estimate of $27.92. The company's revenue guidance of $73.75-$74.75 billion was in line with expectations, but the weak profit outlook weighed on investor sentiment.

A significant factor contributing to Lockheed Martin's weak performance and outlook was the delays in rolling out a technology upgrade for its F-35 fighter jet program, known as Technology Refresh 3. This program, which aims to enhance the jet's displays and processing power, contributes around 30% of the company's revenue and has been facing setbacks.

Additionally, concerns over potential defense spending cuts under the new Trump administration and the formation of the Department of Government Efficiency, headed by billionaire Elon Musk, further dampened investor sentiment. Musk has been critical of legacy defense programs like the F-35 and has advocated for the mass production of cheaper AI-powered drones, missiles, and uncrewed submarines.