United Launch Alliance had high hopes for its new Vulcan Centaur rocket, but they're starting to fall apart -- literally.
As recently as two years ago, United Launch Alliance (ULA), the space launch venture jointly owned by Boeing (BA +2.37%) and Lockheed Martin (LMT 0.53%), had hoped to be launching anywhere from 20 to 30 Vulcans annually by now. It's actually launched just four times in two years.
Worse, as I described last month, two of the four Vulcans ULA has managed to launch experienced anomalies during flight. Although Vulcan's inaugural launch back in January 2024 went off without a hitch, in October 2024, Launch 2 suffered an anomaly when one of the nozzles that directs exhaust flow from Vulcan's two solid rocket boosters fell off during launch.
Launch 3 then proceeded nominally in 2025, only to be followed by Launch 4 in February 2026 -- which had another problem with its solid rocket boosters. Nothing fell off this time, but the engine exhaust apparently burned through the booster nozzle this time, again endangering the spacecraft.
For ULA, which has reservations for 25 Vulcan launches for the Department of Defense on the books, plus more than three dozen launches for Amazon servicing its Leo satellite constellation, this poses a two-pronged problem.
Image source: United Launch Alliance.
Problem 1: The U.S. government
It's considered suboptimal when rockets start spontaneously falling apart mid-flight. While ULA has dodged two such bullets, the law of averages could eventually catch up to this rocket company, and the next such anomaly could be disastrous.
To prevent that from happening, U.S. Space Force has decided to hit pause on further Vulcan flights "until this anomaly is solved." As portfolio acquisition executive Col. Eric Zarybnisky explained late last month, "We will not be launching Vulcan missions" until they've solved the solid rocket booster problem.
How long will that take? Well, it won't be quick. While Col. Zarybnisky says he doesn't "have any details" right now, this early in the investigation, he envisions "a many-months process" before Vulcan can fly again. And it's worth noting that it took more than 10 months after the second Vulcan flight (and first Vulcan anomaly) before the rocket flew its third mission.
Problem 2: If the U.S. government doesn't trust ULA, why should Amazon?
The Space Force pausing its use of Vulcan doesn't necessarily mean that other customers cannot launch on the ULA rocket. Amazon in particular, rushing to get its Leo communications satellites into orbit so that it can compete with SpaceX, might be tempted to throw caution to the wind. But it's more likely that commercial customers will follow the Pentagon's lead on this one.
Chances are, no one will be launching on Vulcan until the Space Force gives ULA the green light to resume launching the rocket.
NYSE: LMT
Key Data Points
What it means for Boeing and Lockheed stocks
Although owned by two publicly traded space stocks, ULA itself does not directly disclose its revenue and profit numbers. Best guesses from financial data powerhouses such as S&P Global Market Intelligence have ULA generating annual revenue of perhaps $1.5 billion, with 50% going to Lockheed and 50% to Boeing.
What is clear is that if Vulcan gets laid up for "many months" and ULA is left launching only the few Atlas V rockets it still has in inventory for much of 2026, the companies' revenue will take a hit. The good news for Boeing and Lockheed shareholders is that this won't necessarily result in a big hit to their stocks.
Why not? Consider Lockheed specifically, which has a dedicated "Space" business division we can look at (in contrast to Boeing, which groups its space revenue in the same bucket as "defense" and "security"). Last year, Lockheed's space division generated $13.4 billion in revenue and converted almost precisely 10% of that -- $1.345 billion, according to S&P data -- into operating profit.
Assuming ULA contributed only $750 million to Lockheed's "space" revenue, though, that's only about 5.6% of the total. Even if ULA's contributions were cut in half by Vulcan's pause, it would barely scratch the surface of Lockheed's (or Boeing's) overall business.
So is the Vulcan mess bad news for these space stocks? Sure it is.
But it's just a scratch. I'm sure it'll buff right out.
