Defense Business Briefing -- November 1, 2022

Welcome to today's Defense Business Briefing, your weekly roundup of the latest defense industry news.

This week's top story

Boeing Defense records major losses, pointing at KC-46A and VC-25B fixed-price contracts

Boeing lost $2.8 billion from its Defense, Space and Security business in the third quarter from fixed-price development programs, according to the company's earnings report, because of continuously rising supply chain and manufacturing costs along with "technical challenges."

News & notes

Northrop Grumman expects to hit low end of 2022 guidance, execs say in earnings call

Northrop Grumman expects to hit within the low end of its forecasted range for sales and profits this year, the company announced in its recent third-quarter earnings call.

Raytheon reports lower Q3 military sales; 'hand-to-mouth' supply chain through 2024

Raytheon Technologies reported a decline in military business sales in the third quarter of 2022 in the company's latest earnings call, a problem largely attributed to supply chain woes that are expected to last into 2024.

GD: Russia-sparked demand boost has become reality

General Dynamics executives recently suggested that demand increases sparked by Russia’s invasion of Ukraine have grown more concrete during the previous quarter, as eastern European countries seek to bolster inventories of ground vehicles, munitions and bridge systems.

GD: Shipbuilding remains profitable despite labor and supply chain challenges

General Dynamics executives reported a profitable third quarter that was largely unimpeded by supply chain challenges and shipyard labor shortages.

Oshkosh: Supply chain snarls lowered revenues

A parts shortage caused Oshkosh to close a manufacturing line for two weeks in the third quarter and contributed to lower defense revenues for the company in the quarter, executives said during an earnings call.

L3Harris reduces 2022 guidance after falling short on Q3 expectations

L3Harris Technologies reduced its 2022 outlook after failing to reach expectations in its third-quarter results, the company announced in its latest earnings report.

Amidst FLRAA delays, Textron CEO projects confidence

Despite what has been a months-long delay for the Army in announcing the winning bidder for its Future Long-Range Assault Aircraft, the CEO of the parent company of one of the two finalists says that company can "live within its guidance."

LaPlante: DOD does not intend to enact policy to boost contracts impacted by inflation

The Defense Department "does not intend to enact a policy to increase contract prices due to inflation,” according to a new letter sent by Pentagon acquisition chief Bill LaPlante to Sen. Elizabeth Warren (D-MA) and obtained by Inside Defense.

To deliver long-range sensing, industry says it can make corporate jets survivable

Defense companies seeking to modify corporate jets to provide intelligence, surveillance and reconnaissance to the Army say they are confident they can make the planes survivable enough to be operationally relevant, even as the Air Force has moved away from a similar capability in recent years.

Pentagon officials warn contractors on their duty to comply with NIST standard ahead of CMMC

Defense contractors should not wait until the launch of the Cybersecurity Maturity Model Certification program to reach compliance with the Pentagon's cyber standard for handling of controlled unclassified information, according to Defense Department officials.

With more award money and faster timelines, Army looks to make contract process easier for small businesses

By awarding more money to small businesses and speeding up the timeframe in which they are awarded contracts, the Army hopes to remove barriers to the private sector in the acquisition process.

Del Toro sounds alarm to defense industry on Chinese spying

Following recent Justice Department charges against alleged Chinese spies, Navy Secretary Carlos Del Toro recently cautioned the U.S. defense industry to be "very protective" of company data and to perform due diligence to thwart adversaries trying to steal sensitive technological information.

What's happening

The week ahead

Senior Pentagon officials are scheduled to speak at several Washington think-tank events this week.

For Inside Defense subscribers

ITEP FARA delivery delayed until spring 2023

Deliveries of the new engine the Army says will power its next-generation attack helicopter are delayed until the spring because of supply chain issues, according to the service.

Navy's unmanned task force becoming 'voice of the fleet'

Using a venture capital model, the Navy's Unmanned Task Force is hoping to field "game changers" for the fleet and heavily experiment to prepare the service for the arrival of unmanned systems.