Iraq War

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On March 20, 2003, a U.S.-led coalition invaded Iraq, setting off a conflict that has yet to be resolved. As with any military campaign, defense contractors and manufacturers of weapons, armor, and related goods, all benefited from increased demand relating to the Iraq War. Even when the war ends, several companies stand to benefit. Defense companies may see declining demand after the fighting ceases, but construction and other companies will likely benefit. Post-war Iraq will need substantial construction to rebuild its infrastructure, logistical and training services for its public employees, and myriad other good and services. Companies specializing in serving these markets could see significantly increased revenues after the dust settles.

[edit] Companies that benefit from the Iraq War

• Dyncorp International (DCP) received 97% of its 2006 revenue from the U.S. government, particularly the Department of Defense. From FY2002 to FY2006, contracts related to the Iraq War increased Dyncorp's revenues over 260%. Additionally, DCP just received a new 10-year contract valued at up to $5 billion per year. The immediate focus of this contract is providing services to U.S. soldiers in Iraq as well as training services to the newly-instated Iraqi government.

• KBR (KBR), a former subsidiary of Halliburton Company (HAL), is the largest defense services provider to the U.S. Army. In 2006, its operations in Iraq accounted for 45% of its revenue, down from 50% in 2005. In addition to defense services, KBR also specializes in the construction of both civil infrastructure and oil and natural gas production facilities. KBR was awarded a contract to reconstruct oil fields in Iraq. The impact of this contract on KBR's revenues and profits is not yet known; the contract had no time or dollar limits.

• General Dynamics (GD) and AM General, a privately held firm, produce Humvees and other military vehicles. GD also manufactures aircraft and sea vessels designed for military purposes.

• Armor Holdings (AH) and Force Protection (FRPT) produce armor for the Humvees and other vehicles used by the U.S. military.

• Lockheed Martin (LMT) just won a $1 billion contract from the U.S. Air Force to train search and rescue crews and special operations forces. Discontinued operations in Iraq would decrease the demand for services such as these.

• DHB Industries, Inc. (DHBT.PK) manufactures bulletproof garments used by the U.S. military. From 2002 to 2004, revenue increased from $130 million to $340 million, an increase of 161%. DHB has not filed a 10-K since 2004, making more recent data unavailable.

• Alliant Techsystems (ATK) derives nearly 80% of its sales from the U.S. government, and more than 35% from the U.S. Army and Air Force combined. ATK designs and produces defense products and missile systems, as well as artillery and ammunition, used by the U.S. military and its allies.

• In Jun 2008, the Oil Majors moved into Iraq to begin drilling for the first time since 1972; despite the outrage many U.S. and international citizens have expressed over their seeming exploitation of a long and bloody war, these oil companies hope to take advantage of the country's estimated 350 billion barrels of oil.^[1]