In a world of increasingly complex threats—from cyberattacks to climate change to sentient robots—there’s still plenty of money being spent (and made) from old-fashioned threats of the ballistic kind.
Raytheon, one of America’s biggest defense firms, which reported its earnings today (Jan. 31), now provides its Patriot missile and air defense system to 16 countries, having added two new contracts in 2018. Patriot combines radar technology to detect incoming missiles, together with “interceptors” designed to be fired at and to destroy them, and the hardware to launch those interceptors. Fresh contracts for the system with Romania will bring in $2 billion, the company said; Sweden’s Patriot contract, also signed last year, could be worth up to $3 billion.
The US, which has a number of different missile defense systems in place, remains Raytheon’s most important customer. Much of the business conducted is only reported as “classified,” with few other details disclosed.
The Trump administration’s Missile Defense Review (pdf), released in January 2019, accorded high priority to defense systems like the Patriot. “All around I think the Missile Defense Review was great for us,” Raytheon chairman and CEO Thomas A. Kennedy said on an earnings call for investors. He also said the company was getting good “demand signals” from the Middle East, Asia, and Europe.
All the countries now buying the Patriot defense system:
- United States of America
- The Netherlands
- Saudi Arabia
- The Republic of Korea
- The United Arab Emirates
Raytheon said it had seen strong performance in the fourth quarter, with net sales up 8.5% to $7.4 billion, and earnings per share from continuing operations up 117% to $2.93 compared to the fourth quarter of last year, when income was dragged down by pension contributions. The company’s share price dropped, however, as its forecast for 2019 total revenue of $28.6 billion to $29.1 billion, up from $27.1 billion in 2018, suggested sales would likely fall short of Wall Street’s forecast.