North Korean threat sparks demand for missile defense
Updated
Lockheed Martin (NYSE:LMT), Raytheon (NYSE:RTN) and other military suppliers say they have received more interest in missile defense systems, as countries focus on bolstering their defenses amid escalating threats from North Korea.
Lockheed, the largest defense contractor in the world, has fielded an increase in customer inquiries regarding missile-related capabilities over the past 12 to 18 months, the company confirmed on Wednesday.
Raytheon, known for the Tomahawk missile and other weaponry, also said global threats are driving demand.
“We are seeing significant demand signals for our integrated air and missile defense, cyber and ISR solutions driven by events going on around the world today. Interest in our international portfolio is strong and growing,” Raytheon told FOX Business.
Kratos Defense & Security Solutions (NASDAQ:KTOS) said it has seen “significantly” more demand for its missile defense offerings. Among other products, the San Diego-based company makes ballistic missile targets that simulate potential threats. Kratos received a $10 million contract earlier this month to manufacture components for an anti-ballistic missile defense system.
“Kratos is receiving significantly increased customer interest in our Ballistic Missile Defense related products and solutions, both in the United States and internationally,” the company said in a statement.
The uptick in demand coincides with accelerated ballistic missile tests in North Korea. On Tuesday, the Kim regime threatened to attack Guam, where thousands of U.S. military personnel are stationed.
President Donald Trump warned North Korea that its threats “will be met with fire and fury.” Trump also tweeted on Wednesday that the U.S. nuclear arsenal is “now far stronger and more powerful than ever before.”
Tim Cahill, vice president of Lockheed’s Air and Missile Defense division, told Reuters that some countries have made missile defense their top priority.
“The level of dialogue around missile defense is now at the prime minister and minister of defense level,” Cahill said.
Lockheed is the company behind the THAAD missile defense system. The U.S. military, which has a THAAD battery in Guam, conducted a successful test of a missile intercept in July. Boeing (NYSE:BA), Raytheon and Honeywell (NYSE:HON) are among the supporting contractors that work on the THAAD system.
Shares of Lockheed rose 1.5% and hit a new all-time high on Wednesday. The stock has rallied 21.8% so far this year. Kratos spiked 4.9%, and Raytheon jumped 2%, also touching a record high.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LMT | LOCKHEED MARTIN CORP. | 543.10 | -2.25 | -0.41% |
| RTN | NO DATA AVAILABLE | - | - | - |
| KTOS | KRATOS DEFENSE & SECURITY SOLUTIONS INC. | 22.99 | +0.12 | +0.52% |