Ukraine war orders starting to boost revenues for big US defense contractors
By Mike Stone
WASHINGTON (Reuters) — The Russian invasion of Ukraine in 2022 is starting to boost defense contractors' revenues, as customers such as the U.S. government restock supplies shipped to Ukraine and countries around Europe arm themselves with an eye on Moscow's aggressions.
U.S. defense contractors such as Lockheed Martin (NYSE:LMT), General Dynamics (NYSE:GD) and others expect that existing orders for hundreds of thousands of artillery rounds, hundreds of Patriot missile interceptors and a surge in orders for armored vehicles expected in the months ahead will underpin their results in coming quarters.
New contracts to supply Ukraine directly — or backfill U.S. weapons sent to Ukraine — were signed late last year, and now revenue is flowing to the big defense contractors. Lockheed, General Dynamics and RTX all reported better than expected results over the past several days, and executives expect both the conflict in Ukraine and Israel's war with Palestinian militant group Hamas to drive up near-term demand.
«We've gone from 14,000 (artillery) rounds per month to 20,000 very quickly. We're working ahead of schedule to accelerate that production capacity up to 85,000, even as high as 100,000 rounds per month,» Jason Aiken, General Dynamics' chief financial officer, said on a call with Wall Street analysts on Wednesday.
«And I think the Israel situation is only going to put upward pressure on that demand.»
The General Dynamics' Combat Systems unit, which makes armored vehicles, tanks and the artillery Ukraine uses, saw its revenue rise almost 25% versus the same period a year ago.
RTX, which makes AMRAAM rockets used in Ukraine, said on Tuesday's earnings call with Wall Street analysts it has received $3
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