Companies Profiting the Most From War
National security and warfare are big business. The U.S. government
spent $598.5 billion, over half of its discretionary budget, on military
and weapons technology in 2015. The 100 largest arms-producing and
military services companies across the globe sold an estimated $370.7
billion worth of arms that year.
In its latest annual report, Top 100 Arms-Producing and Military
Services Companies, the Stockholm International Peace Research Institute
(SIPRI) estimated arms sales for companies around the world using
financial documents and reports of sales to national ministries and
departments of defense. 24/7 Wall St. reviewed the 20 companies with the
largest arms sales in 2015.
U.S.-based companies continue to dominate the defense market, a trend
that is unlikely to change meaningfully any time soon. Virginia-based
Lockheed Martin's arms sales totaled $36.44 billion in 2015, by far the
most of any company. Booz Allen Hamilton rounds out the list of 20, with
$3.9 billion in military-related sales that year. U.S.- and Western
Europe-based companies account for 82.4% of arms sales by the 100
largest military procurement companies.
Aude Fleurant is programme director of the Arms and Military Expenditure
Program at SIPRI. In an interview with 24/7 Wall St., she explained that
because U.S.-based arms manufacturers are so numerous and account for
such a large share of global defense spending, “what is happening in the
U.S. will influence the [military procurement] trends as a whole, as a
Because these companies -- in many cases even foreign arms makers --
sell primarily to the U.S. Department of Defense, sales patterns are
closely linked to budgetary decisions in the U.S. The 2011 Budget
Control Act, for example, resulted in a dip in global military spending.
According to Fleurant, shifting budget priorities, which often change
dramatically after an election or economic event, add a level of
uncertainty that is especially challenging for the defense industry. Not
only are fighter jets, submarines, and highly destructive weapons
available only to governments and armed forces, but also these defense
products often require decades to design, assemble, and test.
The great length of procurement cycles, scale of product capabilities,
limited access to defense markets, as well as the risk of sudden
budgetary changes mean defense companies are under enormous pressure to
find deals among the already very limited pool of customers. According
to Fleurant, the level of uncertainty and these pressures are currently
higher than usual. She highlighted relatively small export markets as
major targets of companies looking to make up lower revenues.
According to a recent report by the Congressional Research Service,
developing nations continue to be the main focus of arms sales.
Countries without large arms industries rely heavily on exports from
powerful nations, primarily the United States and Russia. From 2011 to
2014, the United States and Russia dominated the arms market in the
developing world. Over that period, the United States made nearly $115
billion in such agreements, nearly half of the total value of military
deals. Agreements with Russia totalled $41.7 billion.
To identify the companies profiting the most from war, 24/7 Wall St.
reviewed data provided by the Stockholm International Peace Research
Institute in its annual SIPRI Top 100, a review of the the largest
arms-producing and military services companies by arms sales. Due to a
lack of sufficient data, SIPRI excluded Chinese companies from the
report. Employment data, profit figures, and arms sales as a percentage
of total sales also came from the SIPRI report and are for the 2015
calendar year. Other company-specific data were obtained from annual
Lockheed Martin Corp.
> Arms sales: $36.44 billion
> Total sales: $46.13 billion
> Profit: $3.61 billion
> Employees: 126,000
Maintaining its position as the world’s largest defense contractor,
Lockheed Martin's revenue from arms sales totaled $36.44 billion in
2015. The company’s reach into military and defense technology is
difficult to overstate. Lockheed and its subsidiaries manufacture many
of the U.S. military’s workhorses, including the F-16 and F-22 fighter
jets, the Black Hawk helicopter, and the Vector Hawk unmanned drone. The
company also designs and manufactures air-to-air missiles and missile
Like many other major defense contractors, Lockheed’s biggest customer
is the U.S. government -- accounting for 78% of the company’s 2015 net
sales, the vast majority of which came from the DoD.
> Arms sales: $27.96 billion
> Total sales: $96.11 billion
> Profit: $5.18 billion
> Employees: 161,400
Chicago-based Boeing is not nearly as dependent on federal spending as
other major U.S. contractors. Less than one-third of Boeing’s 2015
revenue of $96.11 billion came from its defense, space, and security
operations. The remainder was attributable to Boeing’s commercial
airplane business. Of the revenue generated from defense contracts, 62%
came from sales to the U.S. DoD.
Like many large U.S. manufacturing companies, including top government
contractors, widely expected higher military spending under President
Trump will certainly help Boeing. Favorable outcomes under Trump are not
guaranteed, however. While the Air Force signed deals with Boeing last
year to design parts of Air Force One, for example, Trump, citing
concerns over cost, called for the deal to be cancelled.
> Arms sales: $25.51 billion
> Total sales: $27.36 billion
> Profit: $1.46 billion
> Employees: 82,500
Some 93% of BAE Systems’ $27.36 billion in 2015 revenue came from
defense contracts. The company manufactures a range of military
equipment, including war ships, munitions, amphibious combat vehicles,
and fighter jets. BAE is the company behind the Harrier jet, capable of
take-off with a short runway, as well as vertical landings. Cyber
security and intelligence services also comprise a small share of the
Though BAE Systems is headquartered in the U.K., deals with the British
government comprise less than a quarter of the company’s annual revenue.
BAE’s biggest clients are in the United States, with corporate and
government contracts comprising over a third of the company’s total 2015
revenue. BAE’s other major markets include Australia and Saudi Arabia.
> Arms sales: $21.78 billion
> Total sales: $23.25 billion
> Profit: $2.07 billion
> Employees: 61,000
Waltham, Massachusetts-based Raytheon is known for its missiles and
missile defense systems. According to the company, 13 countries use
primarily Raytheon air and missile defense. This January, the U.S. Navy
awarded Raytheon a $235 million contract to supply missiles for Aegis
cruisers and destroyers.
Raytheon purchased cybersecurity provider Websense in 2015 for $1.9
billion. The deal was an indication of the growing threat of
cyberattacks, as well as Raytheon’s effort to diversify and move into
commercial markets and away from dependence on defense contracts.
Northrop Grumman Corp.
> Arms sales: $20.06 billion
> Total sales: $23.26 billion
> Profit: $2.0 billion
> Employees: 65,000
Northrop Grumman was awarded in October 2015 the highly coveted $80
billion contract to supply the U.S. military with 100 long-range strike
bombers. The deal is the biggest from the Pentagon in more than a
decade. The B-2 Spirit stealth bomber is the predecessor of the newly
named B-21 Raider.
The company's 2015 arms sales, valued at $23.26 billion, included $1.8
billion for the F-35 fighter jet program, $1.1 billion for the E-2D
Advanced Hawkeye early warning aircraft program, and $947 million for
the Saudi Arabian Ministry of National Guard Training Support program.
General Dynamics Corp.
> Arms sales: $19.24 billion
> Total sales: $31.47 billion
> Profit: $2.97 billion
> Employees: 99,900
General Dynamics manufactures and sells a range of military equipment,
including ammunition, amphibious vehicles, armoured vehicles, and combat
tanks. In addition, General Dynamics owns Bath Iron Works, a naval
shipyard that is currently under contract to build the U.S. Navy’s new
Zumwalt Class DDG-100 destroyer. The ship costs approximately $4
Well over half of General Dynamics’ revenue comes from arms sales, the
vast majority of which are through contracts with the U.S. DoD. Only 13%
of the company’s 2015 revenue came from contracts with foreign
> Arms sales: $12.86 billion
> Total sales: $71.48 billion
> Profit: $3.0 billion
> Employees: 136,570
Europe’s largest aircraft manufacturer, Airbus Group, has three
divisions: commercial, defense and space, and helicopters. The company
is the largest helicopter manufacturer in the world, with a 47% market
share. Most of helicopters the company sells are for military purposes.
Other military related products include cybersecurity technology
development as well as fighter jet and unmanned drone manufacturing.
Despite ranking among the world’s largest defense contractors, less than
a fifth of Airbus’s 2015 revenue were weapons related. The company also
manufactures a range of non-military satellites, and it delivered 635
commercial aircraft in 2015.
United Technologies Corp.
> Arms sales: $9.50 billion
> Total sales: $61.05 billion
> Profit: $4.36 billion
> Employees: 197,200
A major conglomerate with interests in a range of industries, United
Technologies reported over $61 billion in sales in 2015, only 16% of
which came from defense contracts. Still, the company ranks as the
eighth largest defense contractor in the world. The company’s aerospace
division develops and manufactures a range of military technology, from
submarine stealth composites to fighter jet ejection seats. Pratt &
Whitney, a United Technologies subsidiary company, manufactures engines
used in military aircraft worldwide, including the F-22 Raptor and F-16
fighter jets. Pratt & Whitney accounted for $4.23 billion of the
company’s total 2015 sales.
United Technologies’s commercial subsidiaries include air conditioning
unit manufacturer Carrier and Otis, the world’s largest elevator
installer and maintainer.