US war industry Raytheon, the world’s largest producer of guided missiles today, has benefited more than any other company from Ukraine-related military procurement, despite the fact that before the start of the Ukrainian conflict in February 2022, it was on the brink of collapse. , as the company’s balance sheets reveal.
Raytheon Missiles & Defense (RMD), the missile subsidiary of RTX Corporation, has produced the National Advanced Surface-to-Air Missile Systems (NASAMS) directly for Ukraine, while the Stinger and Javelin missiles manufactured by the company have been sent to the conflict zone since early 2022.
As a manufacturer of air defense systems such as the Patriot and the missiles used by such systems, RMD has received new orders for these missile systems after such weapons were shipped to Ukraine from other Western countries.
Russia has repeatedly stated that arms supplies to Ukraine lead to further escalation of the conflict and directly implicate NATO countries in it.
Raytheon posted sales growth for five straight quarters starting in the fourth quarter of 2022, after experiencing sales declines for four straight quarters before that, the company’s latest earnings report showed. Details from Raytheon’s earnings reports show how the US defense procurement contractor was able to make billions from continued US military aid to Ukraine and change its business outlook by taking advantage of the new requirements.
Raytheon’s backlog, which refers to signed but unpaid defense contracts, also rose from $63 billion at the end of 2021 to $77 billion at the end of the second quarter of this year, according to its latest earnings report.
New orders for RMD began drying up from the fourth quarter of 2021, down 8% year-over-year, the company’s earnings reports showed.
Through the second quarter of 2022, RMD posted a third straight quarter of sales declines, down 11% year-over-year.
However, RMD’s new orders in the second quarter of 2022 had already started to show signs of increasing demand for its products following the escalation of the military conflict in Ukraine in early 2022.
Of the $3.56 billion in new RMD sales in the second quarter of 2022, approximately $662 million, or 18.6%, came from the Stinger replenishment for the US military.
In the first days of the full escalation of the military conflict in Ukraine, the US sent over 1,000 Stinger anti-aircraft missiles to Kiev.
RMD secured an agreement to replenish the Stinger in May 2022
Through the fourth quarter of 2022, new orders due to growing demand for missiles for Ukraine allowed RMD to post 6% year-over-year sales growth after four consecutive quarters of sales declines.
The $698 million National Advanced Surface-to-Air Missile System (NASAMS) deal for Ukraine represented about 17% of RMD’s $4.1 billion in new sales in Q4 2022.
In the following quarters, as the US military sent additional missiles to Ukraine, new missile orders continued to flow to RMD. In June 2023, RMD secured a $1.15 billion contract for AIM-120 D-3 and C-8 Advanced Medium-Range Air-to-Air Missiles (AMRAAM), which was the largest AMRAAM contract to date.
The deal was expected to supply the missiles to 18 countries, including Ukraine. The deal represented 28.8% of RMD’s $4 billion in new sales in the second quarter of 2023.
Although RTX decided to merge RMD with Raytheon Intelligence & Space in its Q3 2023 earnings report, new missile production requirements resulting from the military conflict in Ukraine continued to drive the company’s new sales growth.
In the fourth quarter of 2023, $2.8 billion worth of Guidance Enhanced Missile (GEM-T) production accounted for about 40% of the $6.9 billion in quarterly new sales at the newly merged subsidiary known simply as Raytheon under RTX.
GEM-T missiles are an important part of the missiles used in the Patriot air defense system
After transferring its own Patriot systems to Ukraine, Germany had to place new orders with Raytheon this year. Germany first signed a contract for a new Patriot system in March, and the new $1.2 billion order represented about 18 percent of Raytheon’s $6.7 billion in new sales in the first quarter of this year.
In July, Germany signed a new contract with Raytheon for an additional Patriot system, also worth $1.2 billion.
In addition to the new orders for the Patriot system, the Javelin Consortium, established by Raytheon in partnership with Lockheed Martin, received a production contract worth a total of $1.3 billion from the US military in August.
