Boeing, Lockheed Martin, and Northrop Grumman all announced 1Q17 earnings this past week with mixed results. Boeing raised its forecast for full-year earnings after it reported a ~19.0% year-over-year (“YoY”) increase in profit for 1Q17. However, Boeing’s revenue decreased ~7.3% YoY and missed consensus analyst estimates by ~$330 million (~1.5%).
On Wednesday, President Trump held a joint press conference with North Atlantic Treaty Organization (“NATO”) Secretary General Jens Stoltenberg at the White House. In his remarks, Trump stated that he no longer thinks NATO is “obsolete.”
On Thursday, April 6th, President Trump ordered a retaliation Tomahawk cruise missile strike against a Syrian Government controlled airfield that is suspected to be responsible for a chemical weapons attack against innocent civilians in Syria earlier this week. The U.S. retaliation marks the first instance of direct military action against the Assad regime in Syria, adding further strain to already tense relationships in the region, both with Syria and its allies, including Russia.
Lockheed Martin is expected to receive approval from the Pentagon for the production of 200 CH-53K King Stallion helicopters for ~$29 billion. This new helicopter has the ability to transport three times as much cargo as its predecessor, the Super Stallion.
After recent intelligence that the Islamic State is developing a bomb to hide in portable electronics, the U.S. and Britain banned the carrying of electronics larger than a cell phone aboard flights directly from certain Muslim-majority countries in the Middle East and Africa. Anonymous U.S. officials stated that the explosives of concern are designed to be concealed in laptop batteries.
On Thursday, President Donald Trump announced a $1.1 trillion budget proposal for GFY2018 which includes $639 billion for the Department of Defense (“DoD”). The budget request consists of $574 billion for DoD base budget programs and $65 billion for Overseas Contingency Operations (“OCO”).s (“OCO”).
To end the current continuing resolution (“CR”), which has put new-start defense procurements on hold, the United States House of Representatives voted 371-48 to pass a $578 billion defense bill for GFY2017. The spending bill includes $516.1 billion in the base budget and $61.8 billion in overseas contingency operations (“OCO”).
According to a White House official, President Trump’s upcoming budget proposal for GFY2018 will increase the defense budget by $54 billion to $603 billion, a ~10% increase over the spending levels set in the Budget Control Act. This proposed amount is a relatively modest ~$18 billion more than the amount former President Obama had proposed in his final budget.