War-driven demand boosts profits for weapons and aircraft manufacturers

Geopolitical conflicts, including the United States and Israel’s war on Iran and the conflict between Russia and Ukraine, have fuelled surging demand for US defence companies as the Pentagon races to replenish weapon and aircraft stockpiles.

First-quarter results posted this week from Lockheed Martin, Northrop Grumman, RTX Corporation and Boeing saw limited growth as supply chain and production delays weighed on the industry.

Lockheed Martin, which reported its first-quarter earnings on Thursday, fell short of analysts’ expectations, reporting lower first-quarter profit. Net earnings in the first quarter of 2026 came in at $1.5bn, marking a decline from $1.7bn in the first quarter of 2025.

The Bethesda, Maryland-based defence giant said its aeronautics segment was hit by delays in F-16 fighter jet development, which tied flight test issues as supply chain strains weigh on the company’s C-130 transport aircraft.

“The combined cost of the rework and schedule extension ran through our programme estimate,” an executive said on Lockheed’s earnings call.

Sales tumbled as volumes on classified programmes slowed down by $325m from the previous quarter. However, losses were offset by growing sales of F-35 fighter jets.

The administration of US President Donald Trump has proposed purchasing 85 new F-35 jets in 2027.

“We aren’t surprised, given management’s desire to be aligned with the customer’s agenda,” said Seth Seifman, an analyst at JP Morgan.

Lockheed’s stock is tumbling in midday trading, down 5.1 percent since the market opened Thursday, and is down more than 12 percent over the last five days.

Boeing’s losses slow down

Boeing, on the other hand, reported on Wednesday a first-quarter loss of $7m, a reduction from the $31m loss a year earlier. The Arlington, Virginia-based aeronautics giant is trying to recover from several years of turmoil.

Defence and space earnings ticked up 50 percent to $233m in the first quarter. In late March, Boeing was awarded $2.3bn from the US Department of Defense to add onto an existing $4.9bn contract from December.

Space travel drove some of Boeing’s success in the first quarter amid NASA’s successful Artemis II mission around the moon. The effort was part of a joint venture with Northrop Grumman.

The company also saw its highest first-quarter deliveries since 2019 in its commercial aircraft unit. Revenue for the unit rose by 13 percent to $9.2bn for the quarter.

However, those gains were offset by $1.5bn cash burn as it increased production capacity and ramped up certification programmed for 737 MAX variants and the 777X aircraft.