Boeing and Raytheon, key contractors on next-generation Air Force nuclear-missile programs, both posted higher quarterly earnings last week.
Boeing, one of two contractors on the next-generation intercontinental ballistic missile system, reported a 26 percent spike in earnings in the second quarter, to $2.2 billion, or $3.73 a share. Raytheon, one of two tech-development contractors working on designs for a next-generation air-launched nuclear cruise missile, said its earnings surged 45 percent to $800 million, or $2.78 a share.
Each company said the lower corporate tax rates that phased in Jan. 1 played a part in earnings growth.
Quarterly sales at Boeing rose 5 percent to $24.3 billion, and the company increased its sales guidance by $1 billion to between $97 billion and $98 billion, based on higher than expected sales at the defense and services businesses.
Raytheon’s top line increased about 6 percent to $6.6 billion in the quarter, and the company boosted its 2018 guidance by some $200 million to between $26.7 billion and $27.2 billion, citing a rise in domestic and international demand.
Boeing and Northrop Grumman are working on competing designs for new intercontinental ballistic missile systems under the Pentagon’s Ground-Based Strategic Deterrent (GBSD) program. The companies’ three-year contracts are worth about $350 million and $330 million, respectively. The GBSD will replace legacy Minuteman III missiles, which are mostly armed with W78 nuclear warheads designed at the Department of Energy’s Los Alamos National Laboratory in New Mexico.
Raytheon and Lockheed Martin are maturing designs for the future Long-Range Standoff (LRSO) weapon under four-year Pentagon contracts awarded in 2017 and worth about $900 million each. The missile will one day carry the W80 warhead now being refurbished by DOE’s National Nuclear Security Administration.
