Defense Contractors Report Record Backlogs Amid Rising Military Spending
U.S. defense contractors Lockheed Martin (LMT) and Raytheon Technologies (RTX) have reported significant increases in their backlogs, driven by rising military spending under the Trump administration's proposed budget for fiscal year 2027. The Pentagon is seeking a 44% increase in funding, pushing its annual request toward $1.5 trillion—the highest since World War II—while NATO members agreed to boost defense budgets to 5% of GDP by 2035. Both companies posted strong second-quarter results: Lockheed Martin reported an 11% year-over-year sales rise and raised its full-year revenue forecast, while RTX saw a 14% increase in sales. Their combined backlog now exceeds $500 billion, with each company setting new records—Lockheed at $230 billion and Raytheon Technologies at $289 billion. The surge reflects strong demand for military equipment and technology that outpaces production capacity. Despite potential political headwinds if the Republican Party loses control of Congress, bipartisan support remains robust for missile procurement and defense systems like interceptors to counter drone threats.
Topics: budget increase defense contractors geopolitical tensions