As the State Department pauses multiple foreign arms deals, defense contracting executives say they expect some potential delays, but remain optimistic international sales will mostly move forward.
Speaking at a Cowen conference this week, Dave Keffer, Northrop Grumman's chief financial officer, said the new administration "has been clear about its desire to take a close look at sales to certain international customers."
He noted the Biden administration is particularly looking at deals connected with Saudi Arabia and the United Arab Emirates.
"Any place where we had those expectations in our opportunity set for the year -- we're being cautious about the timing of those," he said.
However, Keffer cautioned international sales in total are only about 15% of Northrop's work.
"There's no one particular opportunity there that would be a big impediment for us, but it's certainly something we'll keep an eye on," he said.
Speaking at the same virtual conference this week, Toby O'Brien, Raytheon's CFO, said international sales continue to be "a key for us."
"Almost 40% of the backlog that's attributable to [Raytheon Intelligence & Space] and [Raytheon Missiles & Defense] remains from international customers, and we don't really see that profile changing materially over time," he said.
"New administrations come in, they want to do a review of international arms sales and align it to their foreign policy," O'Brien added. "I think what's important here is the focus is largely around offensive type of weapons and I'd tell you less than 1% of our revenue would really fall in that consumable type of category across the board, never mind to a particular customer or a region."
O'Brien said the majority of Raytheon's sales are defensive weapons.
"International continues to play a key role for us and somewhat of a differentiator going forward in being able to continue to grow our defense business," he said.