To get an idea of just how important international markets have become to U.S. defense companies, look no further than what their executives were saying on their first-quarter conference calls:
Raytheon: "International continues to be a key differentiator for the company. In Q1, our international business represented 26 percent of our total sales."
Lockheed Martin: "We are on a path to grow international sales from approximately 17 percent of total revenues last year to at least 20 percent in the next few years."
Alliant Techsystems: "We have opened international offices with what I call 'feet on the street.'"
America's defense companies make a business out of defeating enemies, and with the federal government's budget shortfall perhaps the industry's Enemy #1 at the moment, companies are going on offense: They're courting new customers abroad.
On call after call over the last few weeks, management tried to assure Wall Street that budget cuts at home are being partially offset by new business overseas. "We have very nice and robust international orders that ought to bridge until the Army begins to re-capitalize," said General Dynamics CEO Phebe Novakovic.
Northrop Grumman echoed others when management said the sequester creates a "delayed effect" as it takes time for the cuts to make their way through to contracts. The real impact will be felt as future contracts are awarded, the company said. In anticipation of lost business, Goldman Sachs pointed out, "The focus on international opportunities remains persistent across the board."