As the Iran war drags on, sales at U.S. defense corporations have risen sharply. As the United States raises the level of attacks on Iran, defense corporations are under pressure from the Ministry of National Defense to increase production.
On the 23rd (local time), the Financial Times (FT) reported that U.S. defense corporations Lockheed Martin, Northrop Grumman, and RTX, Raytheon's parent company, logged record backlogs. These corporations have also successively raised their outlooks for this year.
Lockheed Martin said its second-quarter sales in the missile business recorded $4.1 billion, up 19% from a year earlier. The increase stems from expanded production of Patriot missiles and precision strike missiles used by the United States in the Iran war.
The Center for Strategic and International Studies (CSIS), a Washington think tank, analyzed in May that the United States used 1,000–1,400 Patriot missiles in the Iran war, and that, combined with support for Ukraine, it created "serious order bottlenecks." It projected that clearing this bottleneck would take at least until mid-2029.
Second-quarter sales at Raytheon, which produces Tomahawk missiles, also rose 18% from a year earlier. The Ministry of National Defense has purchased an annual average of 86 Tomahawk missiles over the past 10 years, and the 2027 budget plan includes buying 785 Tomahawk missiles.
Scott Mikus, an analyst at U.S. financial analysis firm Melius Research, said, "Hostilities between Iran and the United States will further reduce inventories of missiles and interceptors sold by Raytheon."
With U.S. weapons stocks running low, defense corporations' backlogs are expected to grow further. According to CNN, through April this year, in the course of full-scale war with Iran, the U.S. military expended about half of its Patriot air-defense missiles and more than 30% of its Tomahawk cruise missiles.
Reuters reported, "President Trump, as the U.S.-Israel war against Iran and the prolonged Russia-Ukraine war have significantly depleted the Ministry of National Defense's weapons stockpiles, has urged defense contractors to ramp up production."
Amid geopolitical instability from the Iran war, U.S. defense corporations are also securing massive orders overseas. According to analyst Mikus, 48% of Raytheon's backlog comes from foreign customers, with a substantial portion driven by demand for Patriot, AIM-120 AMRAAM, and GEM-T missiles. Earlier, Northrop Grumman said it booked $20 billion in contracts in the second quarter, bringing its backlog to a record $105 billion.
Buoyed by growing backlogs, defense corporations' share prices are climbing as well. On the U.S. stock market that day, Lockheed Martin rose 11% from the previous day, and RTX gained about 7%.
Defense corporations have also moved to expand production facilities to meet surging demand. In May, Lockheed Martin broke ground on a new facility in Alabama. Northrop Grumman and Raytheon, along with another major defense contractor, L3Harris, are investing billions of dollars to expand manufacturing capacity.
Christopher Calio, RTX chief executive officer (CEO), said, "We view very positively that the U.S. base defense budget request has surpassed $1 trillion for the first time. This carries very significant meaning," adding, "Because it includes multiyear budget requests, we expect sustained demand for years to come."