Lockheed Martin (NYSE:LMT) saw its shares drop over 4% in premarket trading Tuesday after the defense giant reported lower-than-expected fourth-quarter sales and issued a profit forecast for 2025 that fell short of Wall Street expectations.

In the fourth quarter, the company posted earnings per share of $7.67, surpassing analyst estimates of $6.58. However, revenue for the period totaled $18.6 billion, narrowly missing the consensus estimate of $18.84 billion. Net earnings for the quarter dropped sharply to $527 million, or $2.22 per share, down from $1.9 billion, or $7.58 per share, in the same period in 2023. The decrease was driven by a $1.7 billion loss related to classified programs.

Operational cash flow also took a significant hit, falling 57% year-over-year to $1.02 billion, well below the expected $1.79 billion. Despite these setbacks, the company reported a backlog of $176.04 billion, a 9.6% increase year-over-year, reflecting strong global demand for its advanced defense technologies.

CEO Jim Taiclet highlighted the company’s achievements in 2024, noting 5% sales growth and record-high backlog figures as evidence of robust demand. He also emphasized Lockheed Martin’s commitment to shareholder returns, stating that the company once again returned over 100% of its free cash flow to shareholders.

Looking ahead, Lockheed Martin projected 2025 earnings per share in the range of $27.00 to $27.30, below the consensus estimate of $27.82. Revenue guidance was set between $73.75 billion and $74.75 billion, with the midpoint aligning closely with Wall Street expectations of $74 billion.