This milestone highlights the Pentagon's effort to spur defense contractors into ramping up production of key munitions as worries grow over depleted U.S. stockpiles. Patriot missiles have seen heavy use in Ukraine and during the Iran war.
Northrop Grumman Corp. revealed that it has started manufacturing the propulsion systems used in Patriot interceptor missiles. The company obtained qualification in June to manufacture the propulsion system for Lockheed Martin Corp.'s Patriot Advanced Capability-3 interceptor, and it has already started building them without a finalized contract in place. Northrop anticipates receiving a production award later this year, CEO Kathy Warden said during a Tuesday call discussing the company's second-quarter earnings.
The move allows Northrop to help meet rising demand for Lockheed's PAC-3 missiles, which have been repeatedly launched against drones and other dangers during engagements in Iran and the ongoing war in Ukraine. L3Harris Technologies Inc. remains the single source for solid rocket motors in the PAC-3 program at this time.
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The entry of a second supplier is seen as a strategic step to reduce bottlenecks and ensure a steady flow of interceptor motors as global tensions drive up orders. With production lines already active, Northrop can help Lockheed hit its ambitious expansion targets while the Pentagon works to rebuild munitions inventories.
Northrop currently has 10 multiyear pacts designed to quicken production across its various businesses, representing up to $10 billion in potential sales over the coming seven years, according to Warden.
The company boosted its full-year forecast on Tuesday after reporting higher second-quarter sales in every segment. During the latest period, Northrop recorded $20 billion in new orders, bringing its backlog to an unprecedented $105 billion.
Northrop now projects sales in the range of $43.75 billion to $44.25 billion, a $250 million increase from its prior guidance. Adjusted earnings per share for the year are expected to be between $28.60 and $29.10, the company stated.
According to Warden, the firm expects to reach about $10 billion in annual international revenue by 2031, fueled by demand from Europe, the Middle East, and Australia.
Among the key contracts secured in the second quarter was a $7.6 billion award for the Sentinel program, which will succeed the Air Force's Minuteman III intercontinental ballistic missile. Additionally, Northrop won a $1 billion contract for F-35 work, $800 million for the Glide Phase Interceptor hypersonic defense system, and $4.3 billion for classified projects.
These contract wins underscore Northrop's expanding role across multiple high-priority defense areas, from strategic deterrence to next-generation missile defense, as the company positions itself to capitalize on sustained military spending.
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