"We are seeing some re-strengthening of the defense business, the fiscal year 2018 and 2019 defense budget we have seen is very encouraging -- but we are still eager to see a long-term budget defense solution that is not sequestered, I think that is important for the country and our Armed Forces," Boeing CEO Dennis Muilenburg told TheStreet (TST) - Get Report . "We are seeing strong support for our programs, our fighter lines for example like the F-18 Super Hornet."
The U.S. continued to have the highest spending on the military in the world last year, spending more than the next seven highest spending countries combined according to SIPRI. But at $610 billion, U.S. military spending was flat in 2017 compared to 2016. That amount will start to turn higher in 2018 and 2019 amid efforts from the Trump administration to boost defense spending.
Defense spending is pegged at just under $700 billion this year, with speculation it will top that mark in 2019. And Boeing is primed to cash in via its F-18 fighter jet line and helicopters.
Boeing's defense business, which represents about 22% of annual sales, has already caught a tailwind from the growing U.S. defense budget. The company's defense business racked up $12 billion in new orders in the first quarter, supported also by strong international demand. First quarter sales and operating profits for the division spiked 13% and 18%, respectively, from the prior year.
Boeing's defense backlog tallied an impressive $50 billion.