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Last Updated: Tuesday, 22 April, 2003, 15:00 GMT 16:00 UK
Defence giants boast strong demand
Patriot missile launcher
Raytheon's missiles are selling well
Two of the biggest US defence companies have confirmed that the current global security situation is good for business.

Lockheed Martin, a defence contractor that focuses on aviation, reported a jump in earnings, including a 57% surge in revenues at its aeronautics division.

And Raytheon, which focuses on missile technology, boasted a jump in sales, driven by a 12% leap in government defence contracts.

Both firms were reporting results for the first three months of the year, before the Iraqi war - which began in the third week of March - could have any effect on performance.

Lucky Lockheed

Of the two companies, Lockheed has been the stronger for years, and continued to be so in its first-quarter results.

Lockheed, which builds the F-16 fighter and the F-35 Joint Strike Fighter, reported first-quarter profits of $250m (160m), up 12% year-on-year.

F-16 Fighter
The Iraqi war may not be a boon to all defence manufacturers

Its strongest units was aeronautic technology, which has experienced a surge in business from the development of the Joint Strike Fighter, arguably the biggest military aviation project currently in production.

Crucially for a firm with such dependence on multi-billion-dollar contracts, Lockheed's order book is bulging at record levels.

The firm notched up about $11.3bn in orders during the quarter, leaving it with work worth $74.6bn on its books.

Missiles down

The situation is less straightforwardly positive at Raytheon, a company which has been hit by a series of troubles, including a probe by the US regulator, the Securities and Exchange Commission.

Its net profit of $95m in the first quarter was a substantial improvement on performance a year ago, but was still slightly down on the previous quarter.

Raytheon is having to adjust its results to take account of various non-core costs, most notably write-downs of various subsidiaries, and expenses relating to the company pension scheme.

Nonetheless, Raytheon continues to perform strongly as a US defence contractor.

Raytheon, best-known for making Tomahawk and Patriot missiles, now has outstanding orders worth $26.7bn.

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