Global defense, aerospace firms deliver strong returns for investors over 9 months
Asian defense contractors see highest stock price rises, while Boeing, Lufthansa, and Airbus disappoint
ISTANBUL
Global defense and aerospace firms posted strong performance in the first nine months of the year, boosting investor confidence. Increased defense spending following the Russia-Ukraine War and the EU's decision to expand its defense capacity contributed to the rise in defense stocks.
Increased industry purchases and positive third-quarter balance sheets particularly benefited Asian contractors.
Japan’s National Diet approved a joint fighter jet development project between the UK and Italy, involving Mitsubishi Heavy, UK-based BAE Systems, and Leonardo S.p.A. Reports that Mitsubishi Heavy completed the design of its next-generation nuclear reactor, with plans to begin constructing a production plant, led to a 156.9% rise in its stock over the period.
South Korea's Hanwha Aerospace gained prominence amid the war in Ukraine, recording a 114.8% increase in stock value.
Germany’s Rheinmetall AG saw a 65.9% rise, buoyed by $9.3 billion in orders from Germany and a potential $21.9 billion order from Italy. Leonardo S.p.A’s stocks also rose 34%, driven by the joint venture with Rheinmetall.
US-based RTX Corporation’s stocks climbed 44%, reflecting strong financial performance. Lockheed Martin’s shares rose 29% following a deal to purchase rocket launch vehicles and an agreement with Saudi Arabia to localize parts production. The firm also partnered with General Dynamics for solid-fuel rocket engine production and announced a $450 million acquisition of satellite firm Terran Orbital.
L3 Harris Technologies’ shares rose 12.9% due to $120 million in new orders from the US Marine Corps. UK-based BAE Systems’ stocks increased 11.4%, supported by construction of the Royal Australian Navy’s first Hunter-class frigate and delivery of a new combat vehicle to the US Marine Corps.
French defense contractor Thales saw a 6.4% rise, driven by a contract with Ukraine to supply air defense systems.
Aviation firms disappoint
Boeing faced sanctions from the US National Transportation Safety Board for sharing undisclosed investigation information after a Boeing 737 incident. The company also agreed to pay $243.6 million to settle litigation over two Boeing 737 crashes. Additionally, poor balance sheets and a strike by workers rejecting wage offers further impacted Boeing’s stock, which dropped 41.7%.
European aviation firm Airbus reduced its targets for commercial aircraft deliveries and earnings, postponing production of a new craft, leading to a 6.1% drop in its shares. German airline Lufthansa’s venture into the defense industry resulted in an 18.3% decline in its stock.
*Written by Emir Yildirim
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