Helicopter Exports Fuel Defense Contractor Growth: Why Lockheed Martin and Subcontractors Are Poised to Thrive

The $2.6 billion sale of MH-60R Seahawk helicopters to Norway marks a pivotal moment for U.S. defense contractors. This deal, part of a broader surge in Foreign Military Sales (FMS), underscores the strategic opportunities emerging in defense supply chains. For investors, the combination of recurring sustainment contracts, global demand for advanced maritime capabilities, and the expanding FMS pipeline creates a compelling case for exposure to companies like Lockheed Martin (LMT) and its subcontractors.

The Norway Deal: A Catalyst for Growth

Norway's purchase of MH-60R helicopters—initially valued at $364 million in 2023 for six aircraft—has evolved into a larger opportunity. While the $2.6 billion figure cited by investors likely reflects expanded sustainment agreements and potential upgrades, it signals a critical inflection point. These anti-submarine warfare (ASW) platforms are integral to Norway's defense strategy, particularly in securing its Arctic and North Sea territories.

The MH-60R's versatility—combining ASW, shipboard operations, and interoperability with NATO allies—drives global demand. Over 30 countries, including Japan, India, and Australia, have already adopted the platform. Norway's deal, expected to conclude by 2027, exemplifies how FMS contracts are becoming longer-term partnerships, not one-time sales.

Subcontractors: The Hidden Engines of Profit

While Lockheed Martin is the prime contractor, subcontractors play a vital role in component manufacturing, training systems, and sustainment. Key partners include:
- Thales Defense & Security: Supplies critical dome sonars for ASW missions.
- CAE: Provides flight simulators, ensuring pilot readiness at a fraction of operational costs.
- Raytheon: Delivers Forward-Looking Infrared (FLIR) systems for surveillance.
- Telephonics: Manages radar systems, critical for maritime tracking.

These companies benefit from both initial sales and decades-long maintenance agreements. For instance, Norway's sustainment contract—potentially worth over $1 billion—includes non-recurring engineering adjustments, software upgrades, and logistical support.

The FMS Pipeline: A Steady Revenue Stream

The FMS program is accelerating as U.S. allies modernize their militaries. Norway's F-35A fighter jet program, completed in April 2025, and its MH-60R purchase highlight a pattern: NATO nations are prioritizing interoperability with U.S. systems.

The FMS pipeline is further bolstered by emerging demand from Poland, Taiwan, and the UAE. The MH-60R's role in countering submarines and protecting littoral regions aligns perfectly with global maritime security concerns.

Recurring Revenue: Stability in Volatile Markets

Defense contracts offer unmatched stability. The MH-60R lifecycle spans 30+ years, generating recurring revenue through:
1. Sustainment: Upgrades, spare parts, and maintenance.
2. Training: CAE's simulators ensure operational readiness over time.
3. Exports: Secondary sales to other FMS customers, leveraging existing infrastructure.

This model insulates investors from economic cycles. Even during recessions, governments prioritize defense spending.

Investment Thesis: Targeting the Supply Chain

For investors, the defense sector's resilience and long-term growth make it a must-own asset class. Key recommendations:
- Lockheed Martin (LMT): The prime contractor's diversified portfolio (F-35, MH-60R, space systems) ensures steady cash flows.
- Subcontractor Plays:
- CAE (CAE): Training systems are a high-margin, recurring revenue stream.
- Thales (THLSY): Critical to ASW capabilities, with global FMS exposure.
- ETFs: The iShares U.S. Aerospace & Defense ETF (ITA) offers broad diversification.

Risks and Considerations

Geopolitical tensions and budgetary constraints pose risks. However, the MH-60R's role in NATO's Arctic strategy and ASW dominance mitigate these concerns. The Pentagon's emphasis on FMS as a diplomatic tool also reduces reliance on volatile export markets.

Conclusion

The $2.6 billion Norway deal is not just a one-off sale—it's a blueprint for defense contractors to capitalize on sustainment, global modernization trends, and FMS expansion. For investors seeking stability and long-term growth, the defense supply chain offers a compelling mix of predictability and upside. With Lockheed Martin and its subcontractors positioned to dominate this space, now is the time to secure exposure to this strategic opportunity.