Northrop Grumman Corp., a U.S. defense contractor, predicted full-year sales exceeding Wall Street projections on Thursday, joining a slew of manufacturers profiting from increased worldwide demand for military weapons.
According to Reuters, the United States and its allies have been buying additional weaponry and ammunition and providing billions of dollars in military aid to Ukraine since Russia invaded the nation last year.
Northrop presented its new B-21 “Raider” plane during the quarter, the first of a new class of long-range nuclear stealth bombers for the US Air Force.
“We are upgrading our sales forecast for 2023 and anticipate to produce substantial multi-year cash flow growth,” stated Northrop Grumman CEO Kathy Warden.
The Falls Church, Virginia-based business expects 2023 revenues between $38 billion and $38.4 billion, surpassing the average analyst expectation of $37.86 billion, and an adjusted profit of $21.85 to $22.45 for every share, compared to predictions of $22.30.
Northrop Grumman Corp is hardly the only company benefiting from global conflict.
According to data revealed by the State Department, weapon makers in the United States profited handsomely in 2022 as a result of significant arms sales to other nations, particularly Ukraine.
As a result of the Ukraine conflict and rising tensions between the United States and China over Taiwan, arms sales increased from $35.8 billion in 2021 to $51.9 billion in 2022, with direct weapon sales from U.S. manufacturers accounting for an even greater profit, increasing from $103.4 billion in 2021 to $153.7 billion that same year.
Germany, which has bought 35 F-35 Joint Strike Fighter jets for $8.4 billion, and Poland, which has invested $6 billion on 250 M1 Abrams tanks, are the two largest customers. Others include Spain, the United Kingdom, and Bulgaria, which just joined NATO.
General Dynamics, which manufactures Abrams tanks and Stryker vehicles, reported $2.18 billion in revenue in its combat systems division in the fourth quarter of 2022, up 15.5 percent from the same period in 2021, with operating profitability increasing by more than 18 percent to $332 million.
According to the Financial Times (FT), heightened interest in the group’s vehicles occurred in the second half of 2022 when countries, notably in the West, committed to raising defense spending in response to Russia’s invasion of Ukraine.
The US Army granted General Dynamics a $180 million contract to modify Abrams main battle tanks and a $100 million contract to modernize Stryker M-Shorad vehicles in the 4th quarter. Austria also spent $20 million on tracked vehicle modifications, and Luxembourg purchased $75 million in assault vehicles.
General Dynamics also secured $260 million in ammunition orders, some of which may end up in Ukraine.