War in Iran means more orders for US defence giants

(Patria) - US defence companies report an increase in demand for military equipment, as war in the Middle East triggers new orders from governments around the world, AFP reports.

Earnings released on Tuesday signal that 2026 will be another strong year after a robust 2025, due to the continuation of the war in Gaza and Ukraine, Russian incursions into European airspace, Chinese maneuvers towards Taiwan, and tensions in the Red Sea.

More and more governments are ordering military equipment amid growing geopolitical conflicts. For those already in conflict, there is a need to spend more on replenishing stocks or maintaining machinery.

US defence companies RTX, Northrop Grumman and GE Aerospace reported an increase in orders in the first quarter.

Hoping for a "sustainable solution" to the conflict in the Middle East, RTX CEO Chris Calio told a Wall Street analyst that the company is working with the Pentagon "to accelerate munitions production."

US officials in recent months have announced new agreements to increase production of Tomahawk, Patriot and GEM-T missiles, among other weapons systems.

RTX unit Raytheon previously announced five "significant" agreements with the Pentagon which Calio described as "vitally important to national security." The company has already invested nearly $900 million in expanding capacity.

"The current situation clearly highlights the need for munitions, depth, integrated air and missile defence technology, and more advanced capabilities to counter growing threats," Calio said.

"We see really, really strong demand, both domestically and internationally," he added as the company presented several full-year financial projections.

GE Aerospace described the first quarter as "strong," with revenues up 25 percent due to what CEO Larry Culp described as a "dynamic geopolitical landscape."

Culp said on a conference call that the company expects the war in the Middle East and its effects to last through the summer.

In its defence programs, GE Aerospace continues to "rapidly execute high-priority military needs in support of US and allied warplanes," Culp added.

But the company, which makes engines for Boeing and Airbus, has suffered some negative consequences of the war. Reduced travel to the Middle East has hit the company's maintenance business.

Northrop Grumman also aims to deliver orders for weapons systems as quickly as possible. The company has added twenty new production facilities in the United States in the last two years, according to CEO Kathy Warden.

"It is clear that the conflict with Iran has created an increased sense of urgency," she said.
Calio of RTX said that recent contracts with the Pentagon "will provide the kind of long-term visibility that the supply chain will need to invest, which is critically important."

US Under Secretary of Defence Jules Hurst said that President Donald Trump's budget for fiscal year 2027 requested $1.5 trillion, describing the demand as "a generational investment in the military of the United States, the arsenal of freedom," he said at a Pentagon briefing.

"This 42 percent increase will further strengthen our defence industrial base by expanding production of major weapons systems, while strengthening supply chains and supporting tens of thousands of small and medium-sized enterprises," Hurst said.

Boeing, which also has a defence division, will report results today, and Lockheed Martin on Thursday.