Ukrainian President Volodymyr Zelensky met with several US defense contractors this week, including Raytheon, GE, and Lockheed Martin. A few days later, major defense companies raised their full-year profit estimates significantly.
Spokespeople say that tariffs have no impact on demand for the defense industry. Naturally, Ukraine is seeking duty-free defense imports on defense products paid for by other countries.
Lockheed raised its profit forecast from $22.15–$22.35 per share, up from $21.70–$22.00. The revenue forecast increased to $74.25–$74.75 billion from the previous range of $73.75–$74.75 billion. CEO Jim Taiclet noted there is “unprecedented demand” for Lockheed’s F-35 fighters, CH-53K helicopters, and of course, the highly desired patriot missiles.
“We are investing aggressively in both new digital technologies and physical production capacity needed to meet the top defense priorities of the United States and its allies — and we are doing so in partnership with a number of leading technology partners, large and small,” Taiclet said in a statement.
“In Washington, I spoke with defense companies that produce Patriots and other weapons we need. The willingness to work with Ukraine is fully sufficient — Ukraine is trusted,” Zelensky said on Monday. “It is important that there be enough support for this at the political level in Washington.”
General Electric Aerospace (GE) increased revenue guidance from “mid-teens” to “high teens” in terms of percentage growth. Free cash flow is predicted to be $7.1 billion to $7.3 billion, which is around $1 billion higher than before the meeting with Zelensky. GE stock is already up over 80% YoY, with an 83% increase in deliveries of defense equipment.
Raytheon did not publicly comment on its specific EPS ranges but had a strong Q3. RTX adjusted its full-year earnings to $6.10 to $6.20 from $5.80 to $5.95 and also tacked on an additional ~$1 billion for its sales forecast.
There is a reason why every US defense contractor immediately raised their revenue forecasts after hearing about plans for a continued conflict straight from the horse’s mouth. It is said that Trump and Zelensky had a heated discussion behind closed doors that resulted in a shouting match. Trump has offered Zelensky a way out of this intricately woven web, but he refuses to accept peace. Zelensky has refused to meet with Putin for the past three years, but he sets aside time to meet with defense contractors and any and every world leader willing to lend him a buck or a billion.
