US arms exports hit record high in fiscal 2023
Reuters
Published Jan 29, 2024 02:37PM ET
Updated Jan 29, 2024 03:06PM ET
By Mike Stone
WASHINGTON (Reuters) -Sales of U.S. military equipment to foreign governments in 2023 rose 16% to a record $238 billion, the U.S. State Department said on Monday, as countries sought to replenish stocks sent to Ukraine and prepare for major conflicts.
The figures underpin expectations of stronger sales for the likes of Lockheed Martin (NYSE:LMT), General Dynamics (NYSE:GD) and Northrop Grumman (NYSE:NOC), whose shares are forecast to rise amid rising global instability.
Arms sales and transfers are viewed as "important U.S. foreign policy tools with potential long-term implications for regional and global security," the State Department said in a statement.
Sales approved in the year included $10 billion worth of High Mobility Artillery Rocket Systems (HIMARS) to Poland, $2.9 billion worth of AIM-120C-8 Advanced Medium-Range Air-To-Air Missiles (AMRAAM) to Germany, and National Advanced Surface to Air Missile Systems (NASAMS) to Ukraine.
Lockheed makes the HIMARS, and RTX, formerly Raytheon (NYSE:RTN) makes AMRAAM. RTX and Norway's Kongsberg produce NASAMS.
Lockheed Martin and General Dynamics expect existing orders for hundreds of thousands of artillery rounds, hundreds of Patriot missile interceptors, and a surge in orders for armored vehicles will underpin their results in coming quarters.
There are two major ways foreign governments purchase arms from U.S. companies: direct commercial sales negotiated with a company, or foreign military sales in which a government typically contacts a Defense Department official at the U.S. embassy in its capital. Both require U.S. government approval.
The direct military sales by U.S. companies rose to $157.5 billion in fiscal 2023 from $153.6 billion in fiscal 2022, while sales arranged through the U.S. government rose to $80.9 billion in 2023 from $51.9 billion the prior year.
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Written By: Reuters
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