US defense contractors are riding high these days, buoyed by rising Pentagon spending on the wars in Iraq and Afghanistan as well as the high cost of homeland security in the US-declared war on terror.
The fiscal 2006 defense budget is set to climb to US$441 billion, an increase of US$21 billion over this year. It envisions an additional US$50 billion for the wars in Iraq and Afghanistan.
The US Congress plans to approve US$79 billion for weapons systems procurement and about US$69 billion for military research and development.
Lockheed Martin, Boeing, Northrop Grumman, Raytheon, General Dynamics, Honeywell and United Technologies have all done well in the first half of this year and have a huge backlog of orders. With US President George W. Bush and Congress ready to spend, they can expect robust sales for years to come.
Lockheed Martin, the biggest US defense contractor and top seller of secure computer systems, saw net profit jump 41 percent to US$830 million in the first six months of this year.
Half-year sales rose to US$17.8 billion from US$17.1 billion in the same period last year, despite a drop in deliveries of F-16 fighter jets that cut into warplane sales.
Lockheed, which is also strong on missile defenses, integrated electronic combat systems and military space programs, projects sales for this year of up to US$38 billion and has orders worth another US$73 billion.
Boeing, the second-largest commercial aircraft maker behind Airbus, is also the second-largest US defense contractor. Sales in the first two quarters of the year were up 8 percent to US$27 billion. Earnings dropped 10 percent to US$1.1 billion due to one-time charges related to its commercial aircraft operations, but that didn't dampen the company's outlook.
Boeing's military division posted sales of US$15.3 billion in January-June, an increase of 5 percent. Operating profits rose 16 percent to US$1.7 billion.
Another big prize would be a US government contract for mid-air refueling tankers, where Boeing is competing with the European Aeronautic, Defence and Space Company (EADS).
Boeing also coordinates Future Combat Systems (FCS), an ambitious US$125 billion project aimed at making US soldiers more effective on the battlefield by integrating new weapons and communications systems. Almost all US defense contractors are participating. At the end of June, Boeing had military orders of USS$85.7 billion.
Northrop Grumman, which specializes in warships, warplanes, information technology and space, has US$57.1 billion on its order books. Half-year earnings rose from US$534 million to US$776 million last year on a decline in sales to US$13.4 billion from US$13.4 billion.
Raytheon, best-known for military electronics and weapons systems, saw sales rise 8 percent in the first half of the year to US$10.4 billion.
Tropical Storm Gaemi strengthened into a typhoon at 2pm yesterday, and could make landfall in Yilan County tomorrow, the Central Weather Administration (CWA) said yesterday. The agency was scheduled to issue a sea warning at 11:30pm yesterday, and could issue a land warning later today. Gaemi was moving north-northwest at 4kph, carrying maximum sustained winds near its center of up to 118.8kph and gusts of 154.8kph. The circumference is forecast to reach eastern Taiwan tomorrow morning, with the center making landfall in Yilan County later that night before departing from the north coast, CWA weather forecaster Kuan Shin-ping (官欣平) said yesterday. Uncertainty remains and
SEA WARNING LIKELY: The storm, named Gaemi, could become a moderate typhoon on Wednesday or Thursday, with the Taipei City Government preparing for flooding A tropical depression east of the Philippines developed into a tropical storm named Gaemi at 2pm yesterday, and was moving toward eastern Taiwan, the Central Weather Administration (CWA) said. Gaemi could begin to affect Taiwan proper on Tuesday, lasting until Friday, and could develop into a moderate typhoon on Wednesday or Thursday, it said. A sea warning for Gaemi could be issued as early as Tuesday morning, it added. Gaemi, the third tropical storm in the Pacific Ocean this typhoon season, is projected to begin moving northwest today, and be closest to Taiwan on Wednesday or Thursday, the agency said. Today, there would likely
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
CASUALTY: A 70-year-old woman was killed by a falling tree in Kaohsiung as the premier warned all government agencies to remain on high alert for the next 24 hours Schools and offices nationwide are to be closed for a second day today as Typhoon Gaemi crosses over the nation, bringing torrential rain and whipping winds. Gaemi was forecast to make landfall late last night. From Tuesday night, its outer band brought substantial rainfall and strong winds to the nation. As of 6:15pm last night, the typhoon’s center was 20km southeast of Hualien County, Central Weather Administration (CWA) data showed. It was moving at 19kph and had a radius of 250km. As of 3pm yesterday, one woman had died, while 58 people were injured, the Central Emergency Operation Center said. The 70-year-old