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Report: Defense Companies Plan Capital Expenditures Amid Rise in DoD Contracts

Some contractors have expressed plans to increase their investments in production capacity and facilities in fiscal year 2018 and in the next few years as the Defense Department starts to ramp up contract obligations, USNI News reported Wednesday.

Jason Aiken, chief financial officer at General Dynamics (NYSE: GD), told analysts in a conference call that the company aims to raise its capital spending to approximately 2 percent of revenues.

General Dynamics CEO Phebe Novakovic, a 2018 Wash100 recipient, said the company intends allocate $1.7 billion in capital expenditures at its Electric Boat subsidiary as it anticipates a production increase in Columbia-class ballistic missile submarine and Block V Virginia-class submarine programs.

Officials with Lockheed Martin (NYSE: LMT) said in an earnings call that the Bethesda, Maryland-based defense contractor intends to boost its capital spending from $1.1 billion in 2017 to approximately $1.3 billion this year and in 2019.

Northrop Grumman (NYSE: NOC) plans to increase its capital expenditures from about $900 million in 2017 to approximately $1 billion this year.

Textron (NYSE: TXT) CEO Scott Donnelly said Wednesday that the firm aims to land more contracts with the U.S. Air Force and the U.S. Navy by alloting approximately $225 million in capital spending, according to a transcript of the firm’s earnings call by Seeking Alpha.

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