US defence industry profits rise thanks to military aid to Ukraine

Due to orders of weapons and ammunition for Ukraine and replenishment of stocks of Western allies, US defence companies are increasing their profits.

The largest US defence contractors, such as Lockheed Martin, General Dynamics and others, expect orders for hundreds of thousands of rounds, hundreds of Patriot missiles and increased demands for armoured vehicles to improve their results in the coming quarters, Reuters reported in its analysis.

Recently, Lockheed, General Dynamics and RTX reported better-than-expected financial results. The companies’ management expects that orders to support Ukraine and Israel will mean even more growth in demand for their products soon.

General Dynamics Chief Financial Officer Jackson Aiken says that their production of artillery shells has increased from 14,000 to 20,000 rounds per month. The company expects to reach 85-100,000 per month ahead of schedule.

The General Dynamics division, which manufactures armoured vehicles and artillery supplied to Ukraine, has reported a 25% increase in profits compared to last year.

RTX, which makes AMRAAM air-to-air missiles, said it has received orders worth $3bn since 24 February and expects more as the US transfers aid to Ukraine and replenishes its stockpiles.

Northrop Grumman’s Defence Systems sales rose 6% in the third quarter, driven by demand for ammunition and motors used in GMLRS rounds for M270 and HIMARS multiple launch rocket systems.

Sweden’s Saab has also improved its sales forecasts, and German arms company Rheinmetall says it has seen a jump in demand for weapons and ammunition in Q3.

In October, US President Joe Biden, in his prime-time address to the nation on the war in Israel and Ukraine, stressed that military aid funds for these countries, in practice, mean new orders for the US defence industry and replenishment of US stocks with new weapons of its production.

On 26 October, the United States announced a new military aid package worth $150 million to Ukraine.

As it turned out, Russia’s senseless, brutal and unjust war against Ukraine has given a boost to the development of the defence industry in the US and Europe. Western powers rallied their efforts to help Ukraine repel Russian aggression and restore its territorial integrity by liberating the occupied territories.