Weapons makers Lockheed Martin and RTX predicted strong profits for the rest of this year on Tuesday as their results benefited from surging demand for arms from conflicts in the Middle East and a protracted Russia-Ukraine war.
Missiles, munitions and air defenses were important drivers for both companies, while Lockheed has been awarded an $12.5 billion contract from the Pentagon, for a total of 296 F-35 jets.
Sales at RTX, formerly Raytheon, were also driven by a shortage of new commercial jets as maintenance and repair service providers like RTX worked to maintain airlines flying older, cost-intensive fleets. It also benefited from better jet engine sales.
To be sure, Northrop Grumman trimmed its full-year 2025 sales outlook, but said that it would be more profitable than expected this year.
The company said that timing of certain awards to build weapons dimmed the forecast.
Beyond the replenishment of weapons that have been expended in global conflicts, the Trump administration's flagship Golden Dome missile defense system has bolstered the growth outlook for defense prime contractors.
RTX management told Wall Street analysts on a post earnings call that in addition to munitions replenishment, Raytheon was eyeing billions the US will put towards Golden Dome: "Those things are not in our backlog today. So those are potentially, additive to the backlog."
The Golden Dome system is estimated to cost $175 billion, but uncertainty looms over the basic architecture of the project because the number of launchers, interceptors, ground stations, and missile sites needed for the system has yet to be determined.
Contractors such as Lockheed, Northrop, RTX, and Boeing, have a variety of missile defense systems that are expected to play a role in the missile defense shield.
Northrop CEO Kathy Warden told analysts on Tuesday "we're very pleased to see the urgency the administration is placing on protecting the homeland and the set of opportunities that creates."
STRONG RESULTS
Lockheed Martin, the largest defense contractor in the world, raised its 2025 forecast for revenue and profit on Tuesday, driven by sustained demand for its fighter jets and munitions amid escalating geopolitical tensions.
Lockheed, which makes the F-35 stealth fighters, said its aeronautics segment sales jumped 11.9% to $7.26 billion in the third quarter.
Lockheed now expects a profit of $22.15 to $22.35 per share for 2025, compared with its previous estimate of $21.70 to $22.00.
The company also raised the lower end of its sales outlook to $74.25 billion from $73.75 billion, while maintaining the higher end at $74.75 billion.
Aerospace and defense giant RTX raised its full-year profit and revenue forecast on Tuesday as well, as rising demand for its missiles and services bolstered its ability to weather negative fallout from tariffs.
A shortage of new commercial jets is also driving sales at maintenance and repair service providers like RTX, who are banking on airlines flying older, cost-intensive fleets.
RTX, which makes the GTF engines and competes with CFM International, has benefited from booming demand from planemakers as they ramp up production.
RTX now expects its full-year adjusted sales between $86.5 billion and $87 billion, from its previous forecast of between $84.75 billion and $85.5 billion.
It also raised its adjusted profit forecast to between $6.10 and $6.20 per share for 2025, from $5.80 to $5.95.
Northrop Grumman, which also reported results on Tuesday, was the outlier, raising its 2025 profit forecast for a second straight quarter but trimming its full-year 2025 sales outlook. It now expects between $41.7 billion and $41.9 billion, compared with its previous forecast of $42.05 billion-$42.25 billion.
