Defending the world: A spotlight on the global defence industry

These industry leaders are not just manufacturers of arms and equipment but key players in shaping international security landscapes. Join us on a journey to explore five of the most influential defence companies worldwide, their innovations, and their enduring impact on the world’s safety and stability.

Lockheed Martin (Market Cap: USD 111B)

Lockheed Martin, the world’s largest defence firm and top U.S. government contractor, pioneers advanced fighter jets, high-tech missiles, and electronics through its renowned ‘Skunk Works’ research facility in California.

The conflict in Ukraine has driven a surge in demand for arms and ammunition, including shoulder-fired missiles and artillery. U.S. defence firms, like Lockheed in partnership with RTX, have secured lucrative Pentagon contracts. Their weapons, such as the Javelin anti-tank missiles, play a vital role in Ukraine’s defence. Nevertheless, pandemic-induced labour and supply chain disruptions persistently impact Lockheed’s aeronautics sector, responsible for the advanced F-35 fighter jet production.

Boeing (Market Cap: USD 191B)

While renowned for its commercial aeroplanes, Boeing’s substantial defence division stands among industry giants. Boeing manufactures a variety of aircraft and helicopters for the Pentagon, engages in space ventures, and diversifies into autonomous submarines and other innovations.

Recent Deals:

Boeing, in partnership with the Naval Air Systems Command, Patuxent River, MD, secured a contract worth USD 23.7 million for the P-8A aircraft. Expected to conclude by September 2024, Boeing will provide comprehensive engineering support, logistics management, product support analysis, maintenance planning, technical data, and support equipment maintenance for the P-8A aircraft. The contract extends its benefits to the U.S. Navy and the governments of Australia, Norway, and the United Kingdom, with a substantial portion of the work to be carried out in Jacksonville, FL, and Whidbey Island, WA.

Northrop Grumman (Market Cap: $74B)

Northrop Grumman, renowned for its expertise in stealth bombers and an extensive space portfolio, plays a pivotal role in maintaining the nation’s nuclear triad—a strategic arsenal that includes nuclear missiles, bombers, and submarines, ready to respond to any potential threat.

Recent Deals:

On September 25, 2023, Northrop Grumman Corporation (NYSE: NOC) announced that it had secured a contract worth approximately USD 705 million from the U.S. Air Force for the delivery of the Stand-in Attack Weapon (SiAW), an air-to-ground munition that advances the transition to a new era of air power. Over the next 36 months, the company will work on weapon development, platform integration, and flight testing for rapid prototyping in readiness for swift deployment. The project’s activities will be carried out at Northrop Grumman’s facility in Northridge, California, and its advanced missile integration hub at Allegany Ballistics Laboratory in West Virginia.

General Dynamics (Market Cap: USD 113B)

General Dynamics, one of the United States’ primary military shipbuilders, boasts a diverse portfolio of tanks and land vehicles, solidifying its status as a top vendor for the U.S. Army. In addition to its formidable manufacturing capabilities, General Dynamics houses one of the largest defence-focused IT and services businesses, offering revenue stability even during periods when the Pentagon scales down equipment procurement.

Recent Deals:

On April 27, 2023, General Dynamics NASSCO-Norfolk secured a USD 847 million contract for a seven-year duration to perform repair, maintenance, and modernization on U.S. Navy aircraft carriers. The contract was awarded by the Naval Sea Systems Command, Washington Navy Yard.

Raytheon Technologies (Market Cap: USD 123B)

Raytheon Technologies, the result of the 2020 merger between Defence electronics and missile expert Raytheon and United Technologies, a key producer of aircraft engines and various aerospace components, plays a significant supporting role in numerous critical military platforms led by other contractors, despite not directly manufacturing warships or fighter aircraft.

Recent Deals:

In July 2023, Raytheon Technologies Corp. (RTX) was awarded a substantial $1.15 billion contract to enhance and extend the operational life of the U.S. Air Force and Navy’s AIM-120 Advanced Medium Range Air to Air Missile (AMRAAM). This contract, issued by the U.S. Air Force Life Cycle Management Centre, Eglin Air Force Base, Florida, pertains to the redesign and production of a radar-guided AMRAAM missile featuring an improved guidance section. The package includes AMRAAM production lot 37, the AMRAAM Telemetry System (ATS), initial and field spares, as well as additional production engineering support components and services.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.