Defense Business Brief: Who’s up, down in 2020 earnings; Frozen exports; Leader moves; and more...
By and large, defense companies weathered the first year of the COVID pandemic well, posting solid 2020 results. Companies with large commercial aerospace exposure — see Boeing and Raytheon — did less well. Here’s where the top six finished the year and what they’re expecting in 2021.
Some notes: Northrop’s lower guidance reflects the divesting of its $2.5 billion IT business to Peraton. Other divestitures were made by Raytheon Technologies, formed by last April’s joining of Raytheon and United Technologies and reporting its first yearly earnings this week. Boeing, rocked by the pandemic’s effect on airlines, did not provide 2021 guidance.
The big defense industry story of the week: The Biden administration is freezing arms sales to Saudi Arabia and the United Arab Emirates as officials review the deals approved by the Trump administration. A State Department spokesperson called the pause “a routine administrative action typical to most any transition.” Today, Italy reportedly blocked a $485 million sale of 20,000 missiles to Saudi, Reuters reports.
All is on track for Chris Kubasik to become CEO of L3Harris around midyear, current CEO Bill Brown said Friday morning on the company’s quarterly earnings call. In March, Kubasik is expected to brief investors on his thoughts on “moving more towards a mission solutions provider,” said Brown, who will remain board chairman. Kubasik, who was also on the call, said not to expect an immediate change in the company’s strategy. “Clearly, we've been working on this together for over over two years,” he said. “It will be a smooth transition.”
Confirmed: Defense Secretary Lloyd Austin has resigned from Raytheon Technologies’s board of directors. That happened last Friday “the moment he was confirmed [by the Senate], by prior arrangement,” Pentagon Press Secretary John Kirby said in an email earlier this week. Raytheon formally announced Austin’s resignation in a SEC filing posted Monday morning.
Lockheed CEO Jim Taiclet will become the company's chairman on March 1, replacing Marillyn Hewson, the former Lockheed CEO who will take a senior advisor role. Also, Greg Ulmer has been named the vice president of Lockheed’s Aeronautics business, replacing Michele Evans, who died earlier this year after a battle with illness. Ulmer, the head of the F-35 program, has been the acting VP of the Aeronautics business since December.
From Defense One
Lockheed Overtakes Boeing as Largest US Aerospace and Defense Firm // Marcus Weisgerber
Boeing, which saw no defense revenue growth last year, takes another financial hit from the tanker program.
Northrop Grumman Says It Will Walk Away From Cluster Bomb Contract // Marcus Weisgerber
The company's CEO says the decision is part of a move to "be thoughtful about potential human rights implications" of its products.
Raytheon Expects Biden to Block $500M Bomb Sale to Saudi Arabia // Marcus Weisgerber
Yet industry executives believe foreign arms sales will remain a priority of the new administration.
Sikorsky and Boeing Unveil New Helicopter that Could Replace Army Black Hawk // Marcus Weisgerber
The coaxial helicopter is based on the companies' Defiant prototype.
Military Eyes AI, Cloud Computing in Space in a Decade // Patrick Tucker
Physics keeps the Pentagon from orbiting a computer powerful enough for machine learning. So they're building a network in space.
2021 Is the Year the Small Drone Arms Race Heats Up // Patrick Tucker
The cat-and-mouse of drone defense and offense is entering a new phase.
Saudis Expanding US Military Access to Airfields, Port, to Counter Iran // Katie Bo Williams
The year-old initiative is intended to give CENTCOM "more options" in a fight, general reveals.
'The Ban Should Never Have Been Imposed' // Marcus Weisgerber
Former Army Secretary Eric Fanning says it's time for Congress to pass a law that protects transgender servicemembers.