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Embraer goes on Millennium win streak at Paris Air Show

Embraer goes on Millennium win streak at Paris Air Show

Axios6 hours ago

Embraer's KC-390 Millennium is proving popular.
The company dominated the Paris Air Show narrative last week, notching several deals across Europe.
Why it matters: Embraer has said it wants to be a U.S. prime — one of the military-contracting big boys, like Lockheed Martin, RTX and Northrop Grumman.
It's talked about potential stateside assembly facilities (should the Pentagon place a major order) as well as adding a flying boom aerial refueling system to pique Air Force interest.
Driving the news: Portugal is buying a sixth aircraft, building on its fleet of five; Lithuania is purchasing three for its military transport needs; and the Netherlands inked a contract for aeromedical evacuation suites (mini hospitals) to outfit its collection.
Embraer described the run as "strong sales momentum" when Axios asked about the announcements.
Catch up quick: Embraer's customer list also includes Austria, the Czech Republic, Hungary, Slovakia and Sweden.

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1 Defense Stock That Could Benefit in Times of Global Tension
1 Defense Stock That Could Benefit in Times of Global Tension

Yahoo

timean hour ago

  • Yahoo

1 Defense Stock That Could Benefit in Times of Global Tension

Defense stocks are attracting investor interest in a world marked by rising geopolitical instability, intensifying military activity and a renewed emphasis on national security. Among the numerous defense companies, Lockheed Martin Corporation (LMT) stands out as a top defense stock, with both strategic relevance and long-term growth potential. As one of the world's largest defense contractors and a key U.S. Department of Defense supplier, Lockheed Martin is at the forefront of developing cutting-edge fighter jets, missile systems, and space technology. Its extensive defense portfolio and long-term government contracts make it a dependable and potentially rewarding stock for investors seeking stability and growth in the face of geopolitical uncertainty. This New ETF Promises to Help You Invest Like Warren Buffett and Yields 15% Target Just Raised Its Dividend. Should You Buy TGT Stock Here? 6 Stocks to Buy to Give Your Portfolio the Perfect Mix of Growth, Value, and Defense Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Lockheed Martin stock has returned nearly 150% in the last 10 years. So far this year, the stock is down 5.3% compared to the broader market's 3.8% gain, making now an excellent time to buy this exceptional stock on the dip. Valued at $107.8 billion, Lockheed Martin is consistently regarded as one of the world's largest defense contractors and the leading recipient of U.S. Department of Defense (DoD) contracts. The company operates in four primary business segments: Aeronautics: It is the company's largest and most iconic division, accounting for nearly 40% of total revenue. The segment is divided into four business lines: tactical aircraft, airlift, sustainment, and aeronautical research and development. Missiles and Fire Control (MFC): This division creates advanced weapons, precision strike systems, close combat weapon systems, and air and missile defense systems. Rotary and Mission Systems (RMS): This category includes naval and radar systems, integrated defense solutions, and helicopters. RMS supports a variety of mission types in the air, sea, and cyber domains. Space: The space division is responsible for satellite systems, space exploration vehicles, and missile warning systems. One of the most obvious consequences of rising global tensions is an increase in defense spending, which is working to Lockheed Martin's advantage. The company started 2025 on a strong note, with a 4% increase in sales in the first quarter to $17.9 billion, extending a two-year growth trend in sales. Net earnings increased 14% to $7.28 per share. Lockheed's MFC segment is emerging as a significant growth driver. Q1 sales increased 13% year-on-year, with a 50% increase in operating profit. The company received more than $2 billion in orders for systems such as the JASSM-LRASM, which is expected to produce 1,100 units per year by 2027. PAC-3, GMLRS, PrSM, and the long-running Fleet Ballistic Missile (FBM) program all contributed to the momentum. The company does not rely solely on the U.S. government. It has a large and growing international customer base, which accounts for 25%-30% of its total revenue. In aerospace, Singapore increased its F-35 commitment to 20 jets, demonstrating international demand resilience and resulting in a 3% increase in segment sales. Sales in the RMS segment increased by 6%, with radar systems, integrated warfare systems, and BLACK HAWK helicopter volumes driving the growth. However, in the Space segment, sales declined by 2% YoY due to lower OPIR volumes. In the first quarter, free cash flow of $955 million supported nearly $850 million in R&D investments and capital expenditures to stay ahead of the competition. In the Q1 earnings call, management highlighted that Lockheed's 21st-century security strategy uses digital technologies to integrate aircraft, satellites, missile systems, and ground assets, with artificial intelligence (AI), 5G, distributed cloud, and open C2 systems at its core. Lockheed also has one of the most shareholder-friendly policies in the defense sector. It distributed $1.5 billion to shareholders in dividends and buybacks. Lockheed intends to invest more than $10 billion in R&D and capex by 2027, returning at least $18 billion to shareholders. The company pays an attractive dividend that yields 2.9% and has a 22-year track record of increasing dividends. This makes LMT a good choice for both growth and income investors. Despite the imposition of new Chinese export controls on rare earth elements, management implied that Lockheed is relatively unaffected. The company is legally prohibited from sourcing Chinese materials for U.S. defense products, and it has long-standing contracts with non-Chinese suppliers. Furthermore, U.S. stockpiles and internal sourcing initiatives provide short-term protection, supporting Lockheed's 'anti-fragility strategy' of reducing reliance on adversarial nations for critical raw materials. CFO Evan Scott confirmed the company's full-year outlook remains intact, with tariff-related risks mitigated by cost recovery clauses in fixed-price contracts and cost-type structures that adjust for input price shifts. The guidance includes mid-single-digit sales growth, solid 11% segment margins, and around $6.7 billion in free cash flow. The company emphasized that its $173 billion backlog, equivalent to over two years of sales, supports long-term visibility and growth. Overall, LMT stock remains a 'Moderate Buy' on Wall Street. Of the 23 analysts that cover the stock, 11 rate it a 'Strong Buy,' 11 rate it a 'Hold' and one says it is a 'Strong Sell.' The average analyst target price of $525.50 suggests the stock can rebound and climb by 14.1% from current levels. Plus, the Street-high estimate of $670 implies the stock can rally as much 45.6% over the next 12 months. Lockheed Martin enters the remainder of 2025 with clear momentum. Its growing missile portfolio, long-term sustainment opportunities, and value-oriented modernization strategy form a compelling blueprint for durable growth, making it an attractive buy amid rising global tensions. Defense spending is often non-cyclical and tends to rise even during economic downturns. Unlike consumer goods or discretionary sectors, military programs are funded through long-term government budgets. This resilience makes LMT a defensive stock. On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Sign in to access your portfolio

Switzerland in talks with US as cost of F-35A fighter jets rises
Switzerland in talks with US as cost of F-35A fighter jets rises

Yahoo

time2 hours ago

  • Yahoo

Switzerland in talks with US as cost of F-35A fighter jets rises

By John Revill and Marleen Kaesebier ZURICH (Reuters) -Switzerland is holding talks with the United States after Washington tried to raise the price of new fighter jets Bern is buying for its air force, the government said on Wednesday. Bern chose Lockheed Martin's F-35A Lightning II as its next-generation fighter plane in 2021, with a fixed price of around 6 billion Swiss francs ($7.4 billion) for 36 jets, a decision that attracted controversy in neutral Switzerland. But the U.S. Joint Program Office overseeing the project said last year the price could be higher, and the U.S. Defense Security Cooperation Agency told Switzerland in February that the fixed price was a misunderstanding. Switzerland was informed the price for the F-35s would be dearer because of higher raw materials and energy costs, as well as higher U.S. inflation, with the sum potentially increasing by $650 million to $1.3 billion, the government said. "A contract is a contract," said Urs Loher, head of Swiss defence procurement agency Armasuisse. "With the procurement of the F-35A fighter aircraft, we're suddenly faced with a different reality, despite a clear fixed price." As the agreement prevents a legal settlement of the dispute, a diplomatic solution must be sought, the government said. Defence Minister Martin Pfister said talks were now under way with the U.S. authorities. "We still believe we'll find a solution with the U.S. authorities because they also have an interest in being perceived as a reliable contractual partner," Pfister said, while as a last resort Switzerland could cancel the deal. The decision to buy the F-35A was contested in Switzerland, with opponents arguing against replacing the country's aging F/A-18 jets with an unnecessary "Ferrari" option. Critics said Switzerland did not need cutting-edge warplanes to defend its territory, which a supersonic jet can cross in 10 minutes. The F-35A beat bids from Boeing's F/A-18 Super Hornet, the Rafale produced by France's Dassault and the four-nation Eurofighter built by Italy's Leonardo, Britain's BAE Systems and Airbus representing Germany and Spain. Still, Switzerland said it remained committed to the F-35A, and that cancelling the order would have serious consequences. "Switzerland would no longer be able to guarantee the safety of its airspace and population from 2032, as the current F/A-18 fighter aircraft would reach the end of their service life," Pfister said. ($1 = 0.8067 Swiss francs)

A key NATO ally said it would be 'really big mistake' for Europe to break away from the US weapons industry
A key NATO ally said it would be 'really big mistake' for Europe to break away from the US weapons industry

Business Insider

time2 hours ago

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A key NATO ally said it would be 'really big mistake' for Europe to break away from the US weapons industry

A key NATO member warned that it would be a "really big mistake" for Europe to break away from the US defense industry. European defense spending has risen sharply since Russia's full-scale invasion of Ukraine in 2022, and President Donald Trump has cast doubt on his commitment to NATO and Ukraine, prompting warnings that Europe has to prepare for America withdrawing support. Ursula von der Leyen, the president of the European Commission, said in March that"we must buy more" European weapons, and "that means creating an EU-wide market for defense equipment." Some countries have even said they were rethinking some of the most key types of US-made weaponry, like the F-35 fighter jet, even though there is no like-for-like replacement for the fifth-generation aircraft. Kestutis Budrys, Lithuania's foreign minister, said during the NATO summit on Tuesday that it would be a "really big mistake for Europe just to draw the line, to build defense" capabilities without US involvement, Breaking Defense reported. He said there is "room enough for everyone, and I'm talking about our transatlantic relations on this specific element." Lithuania's defense spending is among the highest of any NATO member as a proportion of its GDP, at an estimated 2.85% in 2024 according to NATO figures. It's one of the countries sounding the alarm that Europe needs to keep increasing its defenses, as Russia could attack beyond Ukraine. Last month, former CIA director David Petraeus said Lithuania was the country he thought was most at risk of a Russian invasion. Defense spending across Europe has soared since Russia's full-scale invasion of Ukraine. EU countries spent an estimated $379 billion on defense in 2024, a 30% rise from 2021, per official figures. But many nations on the continent warn that shortfalls in manufacturing capacity mean that increased spending is not yet enough. Many other European countries, including Lithuania, are still ordering defense equipment from the US. The country already has many US-made weapons in its arsenal, and has placed orders for others like the High Mobility Artillery Rocket System made by Lockheed Martin. Lithuanian Defense Minister Dovilė Šakalienė said in March that her country has signed off on $2 billion worth of business with US defense firms in the past three years. US manufacturer Northrop Grumman announced on Tuesday that it had signed a memorandum of understanding with Lithuania to co-produce ammunition. The UK said on Tuesday that it's buying 12 F-35As, saying they will be used to carry nuclear weapons. The Spanish subsidiary of US defense company Lockheed Martin signed a new agreement with the country's defense ministry in May. Under the agreement, it will work with two Spanish companies on parts for its PAC-3 missiles, which are used by the Patriot air defense system. On his way to the NATO summit, Trump raised doubts about his commitment to Article 5, which obliges members to come to each other's defense, telling reporters on Air Force One there were "numerous definitions" of it. Rutte later said the US president was "totally committed" to Article 5.

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