International News Summary, August 24, 2026

The Pentagon awarded RTX's Raytheon business a five-year multiyear contract with two option years valued at up to $20.7 billion, one of the largest missile production awards in the company's history, as part of efforts to replenish weapons stockpiles amid the conflicts in Ukraine and the Middle East. Raytheon booked $20 billion of defense contracts in the second quarter and carried an $86 billion backlog at the end of that quarter, up from $75 billion at the end of 2025, including $1.8 billion tied to AMRAAM production before the latest award. RTX says AMRAAM production nearly doubled in 2025 versus 2024, and the company is now targeting at least 1,900 missiles annually, roughly a 58% increase from its earlier target of 1,200. In the second quarter, Raytheon's sales rose 18% year over year to $8.27 billion and adjusted operating profit climbed 29% to $1 billion, with adjusted operating margin expanding to 12.6% from 11.6% a year earlier. RTX traded at about 24.6x forward earnings in late September, a roughly 43% premium to the average forward PE of Lockheed Martin at 16.2x, Northrop Grumman at 17x, and General Dynamics at 18.5x, leaving the company little room for error as it scales manufacturing.

Lockheed Martin raised its full-year sales and profit guidance after reporting strong second-quarter fiscal 2026 results and a record backlog of $230 billion. Sales rose 11% from the prior year to $20.1 billion, and net earnings per share came in at $7.94 versus $1.46 a year earlier, when the company was hit by a $1.6 billion charge tied to its Aeronautics unit and helicopter programs that did not repeat. The backlog was up 38.3% year-over-year, an increase of $36.8 billion from six months ago, driven by $65 billion in new orders during the quarter, including a $35 billion multi-year contract for THAAD interceptors. Lockheed now expects full-year sales of $79.75 billion to $81.75 billion, up from an initial range of $77.5 billion to $80 billion and above analysts' average estimate of $79.14 billion, with full-year EPS of $29.95 to $30.65 against earlier forecasts of $29.35 to $30.25 and Wall Street's $29.90. The stock trades at a forward price-to-earnings ratio of 16.16, below the sector median of 18.97, below peer RTX at 24.57, and below its own five-year average of 17.79, with investors watching how the F-35 maker delivers on its third-quarter results expected later this month.

Avio USA broke ground on its first U.S. manufacturing facility, an approximately 900,000-square-foot solid rocket motor plant in Hurt, Virginia, that will add significant domestic capacity for U.S. missile and munitions production. Located at the Southern Virginia Multimodal Park, the facility will give Avio USA the capacity to produce thousands of solid rocket motors annually for U.S. tactical missile programs, and the company expects to create roughly 1,500 high-quality technical jobs in Southern Virginia. Avio USA is a subsidiary of Avio S.p.A., the Rome-based rocket and space propulsion group, and operates under a DCSA Special Security Agreement; CEO James Syring said the goal is to be an independent, open-source merchant supplier able to support multiple customers and programs. HITT Contracting is leading construction as general contractor, with completion expected by late 2028 and production anticipated to begin in early 2029, supporting solid rocket motor requirements across the U.S. defense industry, including programs for Lockheed Martin and Raytheon. Avio CEO Giulio Ranzo said the successful completion of the company's capital raise provided the resources for the investment, which will expand U.S. solid rocket motor manufacturing capacity and establish a lasting American presence for Avio.

Boeing announced on the 5th that it has been awarded a seven-year contract worth about $14.7 billion from Lockheed Martin for the expanded production and delivery of seekers, the guidance units, for the PAC-3 Missile Segment Enhancement, or MSE, hit-to-kill interceptor. Under the contract, Boeing will be able to triple its production of PAC-3 MSE seekers. The PAC-3 MSE is a hit-to-kill interceptor used in the Patriot air defense system to intercept ballistic missiles, cruise missiles and aircraft. Lockheed announced in January that it had signed a seven-year framework agreement with the U.S. Department of Defense to raise annual production capacity for PAC-3 interceptors from about 600 to 2,000, and the latest contract is part of that production expansion. Demand for interceptors has surged as conflicts in the Middle East and Ukraine strain U.S. weapons stockpiles, and the U.S. Army in July awarded Lockheed a contract worth up to $58.6 billion to expand PAC-3 missile production. Industry executives, however, warn that Congress has not yet approved the funding needed for these contracts, and contractors may be unable to make large investments in parts and facilities until lawmakers act.

The FY2026 defense appropriations agreement includes more than $6.3 billion for 13 critical munitions and grants conditional multiyear procurement authority for eight of those programs, a tailwind for RTX Corp. as it scales production of AMRAAM air-to-air missiles, Standard Missiles and Tomahawk cruise missiles. RTX's order backlog reached a record $289 billion by the end of second quarter fiscal 2026. The company will spend $25 million to expand its Niepołomice site in Poland, which delivers tubular assemblies for commercial and military engines, following a $100 million capital outlay announced in April for its Rzeszów facility. RTX closed at $185.01 on October 1 with a market capitalization of about $249.3 billion, trading at a trailing P/E of 33.62x and a forward P/E of 24.57. Hedge fund ownership slipped from 95 funds in Q1 2026 to 92 funds in the following quarter, while BlackRock remains the largest institutional stakeholder with 110.53 million shares, or 8.20% ownership.