US defense contractors boost revenues as war in Ukraine continues ⋆ cowboy Ron News Information

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US defense contractors boost revenues as war in Ukraine continues

Robert Besser
30 Oct 2023, 23:39 GMT+10

Moscow’s invasion of Ukraine in 2022 is boosting the revenues of U.S. defense contractors, as the U.S. government is restocking supplies and European countries are buying more weapons to counter Russia’s threat
Lockheed Martin, General Dynamics, and other U.S. defense contractors predict existing and future orders for artillery rounds, Patriot missile systems, and armored vehicles to boost their financial results in the coming quarters
After contracts to supply Ukraine directly, as well as for backfill U.S. weapons sent to the country, were signed late last year, the major defense contractors are now seeing revenues flow.

WASHINGTON D.C.: Moscow’s invasion of Ukraine in 2022 is boosting the revenues of U.S. defense contractors, as the U.S. government is restocking supplies and European countries are buying more weapons to counter Russia’s threat.

Lockheed Martin, General Dynamics, and other U.S. defense contractors predict existing and future orders for artillery rounds, Patriot missile systems, and armored vehicles to boost their financial results in the coming quarters.

After contracts to supply Ukraine directly, as well as for backfill U.S. weapons sent to the country, were signed late last year, the major defense contractors are now seeing revenues flow.

Lockheed, General Dynamics and RTX (RTX.N) all recently reported better-than-expected results, and according to executives, both the conflict in Ukraine and Israel’s war with the Palestinian militant group Hamas will drive short-term demand.

On October 25, Jason Aiken, General Dynamics’ chief financial officer, said, “We have gone from 14,000 artillery rounds per month to 20,000 very quickly. We are working ahead of schedule to accelerate that production capacity up to 85,000, even as high as 100,000 rounds per month.”

The General Dynamics’ Combat Systems unit, which makes armored vehicles, tanks, and artillery used by Ukraine, witnessed an almost 25 percent rise in revenue compared with the same period last year.

On Tuesday, RTX, which produces AMRAAM rockets used in Ukraine, said it had received orders worth US$3 billion since Russia’s February 2022 invasion.

Northrop Grumman’s Defense Systems segment, which produces ammunition and rocket motors used in guided multiple-launch rocket systems (GMLRS), which have supported Ukraine’s defensive efforts against Russian forces, saw its third-quarter rise by six percent.

However, executives from several defense firms cautioned that a lack of skilled labor and supply chain issues will continue to hamper their companies’ capacity to fill orders.

“The supply chain, to be completely candid with you, remains, and I think we expect to remain what I call fragile,” General Dynamics’s Aiken said on the earnings call.