The war in Ukraine has brought unprecedented sales and profits for the defense contractor Lockheed Martin, according to its second-quarter results for 2023. The company, which reported higher-than-anticipated revenues, has seen its fortune rise amidst the ongoing Ukrainian conflict and the associated surge in demand for Western military aid.
Lockheed Martin’s net sales for the quarter clocked in at a robust $16.8 billion, yielding earnings of $1.7 billion ($6.63 per share), according to a recent news release. The sales figure shows an impressive 8 percent growth, which is majorly credited to large orders for the F-35 multirole stealth fighter aircraft and two missile systems, the GMLRS and HIMARS, both being extensively utilized by Ukrainian forces against Russian positions.
Chairman, President, and CEO of Lockheed Martin, Jim Taiclet, expressed satisfaction with the company’s robust financial performance. He further projected a positive outlook for the remainder of 2023, hinting at an increase in full-year sales and earnings per share, propelled by continued demand for their advanced technologies and flagship programs.
The company also expressed optimism about rewarding shareholders with reliable free cash flow per share expansion and cash deployment, a signal of confidence in their growth trajectory. Estimates for the company’s full-year sales for 2023 are anticipated to touch an all-time high of $66.75 billion.
Lockheed Martin, based in Bethesda, Maryland, has emerged as a prime beneficiary of the Ukraine conflict, experiencing a surge in demand for its F-35s, Patriot air defense missile systems, rockets, and launchers. This heightened demand has resulted in a record backlog of $158 billion for the company. Furthermore, its missiles and fire-control unit have witnessed a 24 percent increase in order backlog in the last quarter.
Defense companies, including Lockheed Martin, are often closely linked to defense budgets and are beginning to feel the effects of the Pentagon’s increased 2023 spending plan. The quest for more sales is supported by policy advocacy from researchers and think tanks funded by defense contractors, who champion the call for more weaponry and aid to Ukraine.
However, concerns have been raised about this symbiotic relationship. The Quincy Institute points out that think tanks with financial ties to the arms industry tend to favor policies that would benefit the said industry. In essence, these organizations often promote ideas that feed into the defense industry’s business, leading to a cycle of conflict and profit.
It’s essential to acknowledge that, while the defense industry plays a critical role in global security, it’s necessary to maintain a balanced perspective on the implications of war-time profits. Striking a balance between ensuring security, promoting peace, and navigating the economic impacts of conflict remains an ongoing challenge and one that merits open and ongoing discussion.
