Defense Contractors Seen Lifting Third-Quarter Sales and Profit Amid Iran War Demand

what happened

According to Earnings Preview, several defense companies are set to publish third-quarter results on Tuesday. Investor attention on the sector has grown because of the war in Iran, where U.S. operations are short of missiles.

The companies are ramping up output and building new plants, and expect to spend more this year. Yet their order backlogs are expanding faster than deliveries, and many of the new missiles will not arrive for several years. President Trump and European defense ministers have called for a faster production pace.

Analysts surveyed by FactSet expect GE Aerospace to earn 2.01 dollars per share on an adjusted basis, with revenue of 12.88 billion dollars, up from 1.66 dollars and 11.31 billion a year earlier. For RTX, the estimates are 1.78 dollars and 24.11 billion, versus 1.70 dollars and 22.48 billion. Northrop Grumman is projected at 7.18 dollars per share and 11.14 billion in revenue, compared with 7.67 dollars and 10.42 billion last year.

why it matters

For markets, the earnings calls will matter as much as the headline figures, since investors will watch capital spending forecasts and remarks on production progress. These will show how quickly the industry can work through its growing backlog. Northrop Grumman's expected profit per share is below its year-earlier level, unlike the other two companies.

market impact

Defense sector: strong missile demand and rising backlogs support interest in major contractors' shares

tags

instruments