US defense contractors are riding high these days, buoyed by rising Pentagon spending on the wars in Iraq and Afghanistan as well as the high cost of homeland security in the US-declared war on terror.
The fiscal 2006 defense budget is set to climb to US$441 billion, an increase of US$21 billion over this year. It envisions an additional US$50 billion for the wars in Iraq and Afghanistan.
The US Congress plans to approve US$79 billion for weapons systems procurement and about US$69 billion for military research and development.
Lockheed Martin, Boeing, Northrop Grumman, Raytheon, General Dynamics, Honeywell and United Technologies have all done well in the first half of this year and have a huge backlog of orders. With US President George W. Bush and Congress ready to spend, they can expect robust sales for years to come.
Lockheed Martin, the biggest US defense contractor and top seller of secure computer systems, saw net profit jump 41 percent to US$830 million in the first six months of this year.
Half-year sales rose to US$17.8 billion from US$17.1 billion in the same period last year, despite a drop in deliveries of F-16 fighter jets that cut into warplane sales.
Lockheed, which is also strong on missile defenses, integrated electronic combat systems and military space programs, projects sales for this year of up to US$38 billion and has orders worth another US$73 billion.
Boeing, the second-largest commercial aircraft maker behind Airbus, is also the second-largest US defense contractor. Sales in the first two quarters of the year were up 8 percent to US$27 billion. Earnings dropped 10 percent to US$1.1 billion due to one-time charges related to its commercial aircraft operations, but that didn't dampen the company's outlook.
Boeing's military division posted sales of US$15.3 billion in January-June, an increase of 5 percent. Operating profits rose 16 percent to US$1.7 billion.
Another big prize would be a US government contract for mid-air refueling tankers, where Boeing is competing with the European Aeronautic, Defence and Space Company (EADS).
Boeing also coordinates Future Combat Systems (FCS), an ambitious US$125 billion project aimed at making US soldiers more effective on the battlefield by integrating new weapons and communications systems. Almost all US defense contractors are participating. At the end of June, Boeing had military orders of USS$85.7 billion.
Northrop Grumman, which specializes in warships, warplanes, information technology and space, has US$57.1 billion on its order books. Half-year earnings rose from US$534 million to US$776 million last year on a decline in sales to US$13.4 billion from US$13.4 billion.
Raytheon, best-known for military electronics and weapons systems, saw sales rise 8 percent in the first half of the year to US$10.4 billion.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS