For the exclusive use of JATIN CHAWLA at TVF CAPITAL ADVISORS PTE LTD on 22-Jun-2025 22 June 2025 Global Aerospace & Defense Global Defense: Bombing of Iran; Implications for defense stocks? Douglas S. Harned, Ph.D. +1 917 344 8430 douglas.harned@bernsteinsg.com Adrien Rabier +44 20 7676 6820 adrien.rabier@bernsteinsg.com Specialist Sales James Brady +44 207 762 5272 james.brady@bernsteinsg.com Friday, June 13th, Israel launched strikes against Iran on its nuclear program, military facilities and top milita ...

For days, Israel's defenses have largely held up against Iran's missile attacks. But there's a growing concern that Israel is burning through its defensive weapons. And its aero interceptors, which play a key role in taking out Iran's ballistic missiles, are in short supply, according to a US official.The United States, which has been helping Israel shoot down threats, is also expending its munitions. The US official and analysts familiar with the numbers say that Iran has more missiles than Israel and the ...

Core Viewpoint - The global arms trade is experiencing unprecedented growth, driven by ongoing conflicts and geopolitical tensions, with the U.S. military-industrial complex reaping significant profits from these situations [3][4][11]. Group 1: Military Industrial Complex - The U.S. military-industrial complex has a historical relationship with government interests, significantly influencing global conflicts and arms sales [8][10]. - Major U.S. defense contractors, including Lockheed Martin, Boeing, and Raytheon, have seen substantial revenue growth, with Lockheed Martin's defense revenue reaching $40.6 billion in 2023, accounting for 59% of its total revenue [26]. - The U.S. accounted for 42% of global arms exports from 2019 to 2023, a 17% increase from the previous period, with significant sales to countries like Saudi Arabia and Japan [12][13]. Group 2: European Arms Industry - The European arms industry is also experiencing a resurgence, with companies like Rheinmetall reporting a 73% increase in sales due to rising demand from Ukraine and Germany [28]. - European defense spending has surged, with NATO countries increasing military budgets to a total of $1.5 trillion, representing 55% of global military spending [36]. - The European arms market is expanding, with major companies like BAE Systems and Rheinmetall ramping up production to meet growing demand, leading to record backlogs of orders [37][38]. Group 3: China's Military Exports - China's military products have gained recognition in international markets, particularly during the recent India-Pakistan conflict, challenging the perception that China only follows Western military technology [41]. - Chinese defense exports are subject to strict government regulations, with a focus on enhancing the self-defense capabilities of recipient countries without compromising regional stability [56][57]. - The Aviation Industry Corporation of China reported defense revenues of $35.2 billion in 2023, representing 90% of its total revenue, indicating a strong position in the global arms market [26]. Group 4: Global Arms Trade Dynamics - The global arms trade is heavily influenced by ongoing conflicts, with the U.S. and European companies benefiting significantly from these situations [30][61]. - The arms trade is characterized by a complex interplay of political, economic, and security factors, with major players manipulating these dynamics for profit [24][61]. - The rise of military technology companies, such as Palantir, highlights the increasing importance of data analytics in modern warfare and defense strategies [21].

Lockheed Martin (LMT) Q1 2025 Earnings Call April 22, 2025 11:00 AM ET Company Participants Maria Ricciardone - Vice President, Treasurer and Investor RelationsJim Taiclet - Chairman, President and CEOEvan Scott - CFODavid Strauss - Managing Director - Aerospace & Defense Equity ResearchKristine Liwag - Executive DirectorPete Skibitski - Director - Aerospace & Defense Equity ResearchDouglas Harned - Managing DirectorScott Deuschle - Director - Aerospace & Defense Equity ResearchMichael Ciarmoli - Managing D ...

Lockheed Martin Corporation (LMT) Q1 2025 Earnings Conference Call April 22, 2025 11:00 AM ET Company Participants Sarah - Conference Call ModeratorMaria Richard-Own - Vice President, Treasurer and Investor RelationsJim Taklett - Chairman, President, and Chief Executive OfficerEvan Scott - Chief Financial Officer Conference Call Participants David Strauss - Analyst, BarclaysBasin Gursky - Analyst, CitiChristine Lewald - Analyst, Morgan StanleyGautam Khanna - Analyst, TD CowanRich Safran - Analyst, SeaportPe ...

Core Insights - Lockheed Martin Corporation reported first quarter 2025 sales of $18.0 billion, a 4% increase from $17.2 billion in the same quarter of 2024. Net earnings rose to $1.7 billion, or $7.28 per share, compared to $1.5 billion, or $6.39 per share, in the prior year [1][5][39]. Financial Performance - Sales increased by 4% year-over-year to $18.0 billion [5][39]. - Net earnings for the quarter were $1.7 billion, translating to $7.28 per share, up from $1.5 billion and $6.39 per share in Q1 2024 [1][5][39]. - Cash from operations was $1.4 billion, down from $1.6 billion in Q1 2024, while free cash flow decreased to $955 million from $1.3 billion [1][6][39]. - The company returned $1.5 billion to shareholders through dividends and share repurchases [5][7]. Business Segments - Aeronautics segment sales increased to $7.1 billion, a 3% rise, driven by a $215 million increase in F-35 program sales [14][39]. - Missiles and Fire Control (MFC) sales surged by 13% to $3.4 billion, primarily due to a $370 million increase from tactical and strike missile programs [17][39]. - Rotary and Mission Systems (RMS) reported a 6% increase in sales to $4.3 billion, attributed to higher volumes in integrated warfare systems and Sikorsky helicopter programs [19][39]. - Space segment sales decreased by 2% to $3.2 billion, mainly due to lower sales in national security space programs [21][39]. Operational Highlights - The company maintained a backlog of $173 billion, representing more than two years of sales [2][5]. - Lockheed Martin invested over $850 million in research and development and capital expenditures during the quarter [2]. - The company reaffirmed its financial outlook for 2025, projecting sales between $73.75 billion and $74.75 billion [9][8]. Cash Flow and Shareholder Returns - Cash from operations was $1.4 billion, with free cash flow at $955 million, reflecting a decrease from the previous year [6][39]. - The company paid cash dividends of $796 million and repurchased 1.7 million shares for $750 million during the quarter [7][39].