Defense companies raise their forecasts for 2025 as demand rises

Defense and aerospace companies raised their forecasts for this year on Tuesday, citing strong demand despite economic uncertainty and tariffs.

General Electric Aerospace, Northrop Grumman, RTX and Lockheed Martin Each beat Wall Street’s third-quarter earnings estimates, with only Northrop missing revenue estimates, based on a survey of analysts conducted by LSEG.

GE, a defense supplier and major engine maker Boeing and Airbus Commercial Airplanes, raised its full-year adjusted revenue growth outlook from “mid-teens” to “high” and its free cash flow outlook from a range of $6.5 billion to $6.9 billion to a range of $7.1 billion to $7.3 billion.

The company said its quarterly defense deliveries were up 83% from a year ago, and deliveries of LEAP engines, used to power planes such as the Boeing 737 Max and Airbus A321neo, also hit a record, up 40% year-on-year.

Its adjusted revenue of $11.31 billion for the third quarter beat Wall Street estimates of $10.41 billion. The company’s shares have risen by more than 80% since the beginning of the year so far.

Shares of RTX rose nearly 9% in morning trading after the major defense contractor, whose business makes products such as commercial aircraft cabin interiors and engines, raised its full-year revised earnings forecast from a range of $5.80 to $5.95 to a range of $6.10 to $6.20.

It also raised revised sales guidance from a range of $84.75 billion to $85.5 billion to a range of $86.5 billion to $87 billion.

The company cited its ability to withstand the impact of tariffs and other macroeconomic uncertainties as positive signals for its growth. In July, the company estimated losses of $500 million related to tariff costs and lowered its guidance.

On Tuesday, RTX reported positive growth in its aerospace and defense units, with a 12% increase in total revenue to $22.48 billion in the third quarter.

“We remain focused on executing on our $251 billion backlog and increasing our production to support the ramp across critical programs, while investing in next-generation products and services that meet the needs of our customers,” CEO Chris Calio said in a statement.

Northrop Grumman reported similar growth. The company reported earnings of $7.67 per share, well above Wall Street estimates of $6.46 per share, according to LSEG. Northrop’s sales increased 4% year over year, while sales within its Defense Systems division rose 14%.

Although the company missed Wall Street revenue estimates, it raised its guidance for full-year adjusted earnings per share by 65 cents to a range of $25.65 to $26.05.

“As a result of this performance and our positive outlook for the remainder of the year, we are once again increasing our 2025 EPS guidance,” Northrop CEO Cathy Warden said in an earnings release. “I am excited about the continued progress we are making in urgently responding to our customers’ needs.”

Lockheed Martin, the last of the four stocks to report on Tuesday morning, also beat analysts’ expectations for the quarter ending September 30. The defense contractor reported earnings of $6.95 per share. On revenue of $18.61 billion, beating Wall Street estimates of $6.36 per share and $18.56 billion, respectively.

CEO Jim Taiclet said the company is seeing “unprecedented demand” among customers in the United States and around the world, prompting Lockheed to “significantly” increase production capacity across the company’s various divisions.

Lockheed boosted its lower-end sales forecast for the full year and now expects revenue between $74.25 billion and $74.75 billion. It also raised its earnings forecast from a range of $21.70 to $22 to a range of $22.15 to $22.35.

“We are investing aggressively in both new digital technologies and physical production capabilities needed to meet the top defense priorities of the United States and its allies — and we are doing so in partnership with a number of leading technology partners, large and small,” Taiclet said in a statement.

He added that the American Golden Dome project will be a major driver of growth as its construction begins. The project’s cost is estimated at $175 billion, with an initial $25 billion allocated in next year’s defense financing package.

The United States increased its defense spending over the past year. For fiscal year 2024, the Biden-Harris administration has requested a budget of $842 billion for the Defense Department, which is $100 billion more than for fiscal year 2022 — though final appropriations from Congress could differ from those numbers.

For 2025, the Biden-Harris administration has requested a budget of $849.8 billion. The government’s priorities in the budget included confronting the threats of countries such as Russia, Iran, and North Korea.