South Korea Orders $4.2 Billion in Military Helicopters from Boeing and Lockheed Martin

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Brief bouts of fighting in the Strait of Hormuz this week, including Iranian drone attacks on commercial shipping and U.S. Navy responses, underscore the ongoing tensions in the region. Meanwhile, South Korea is proactively preparing for future conflicts by strengthening its military capabilities.

Helicopter Procurement Details

The U.S. State Department informed Congress that South Korea has requested two separate helicopter procurement programs from American defense contractors. The first involves upgrading existing Boeing AH-64E Apache attack helicopters, while the second entails acquiring new Lockheed Martin Sikorsky MH-60R Seahawk multimission helicopters.

Boeing will serve as prime contractor for the Apache upgrade program, which includes 36 APG-78 fire-control radar systems, 36 Longbow FCR Radar Electronic Units, 40 VHF/UHF radios, and associated equipment. This $1.2 billion order will enhance South Korea’s fleet of 36 existing Apaches and 36 additional aircraft on order.

In the larger procurement, South Korea has requested 24 MH-60R Seahawk helicopters along with 24 Airborne Low Frequency Sonar systems for anti-submarine warfare missions. Lockheed Martin, which acquired Sikorsky in 2015, will lead this $3 billion program as the principal contractor.

Financial Implications for Defense Contractors

The combined $4.2 billion in helicopter-related contracts provides significant revenue opportunities for both companies. While congressional approval is required, the likelihood of passage is high given the rare nature of such disapproval votes in recent decades.

At Boeing, the Apache upgrade work will be handled by the Defense, Space & Security division (BDS). Although BDS reported losses in 2022 and 2023, losses narrowed to $128 million last year and the division posted a $233 million operating profit in the first quarter of 2026, representing a 50% year-over-year improvement.

For Lockheed Martin, the Seahawk contracts fall under the Rotary and Mission Systems (RMS) segment. RMS generated $1.3 billion in operating profit on $19.7 billion in sales last year, achieving a 6.7% margin. The segment’s profitability improved further in Q1 2026, reaching a 9.2% margin.

Based on the expected 9.2% margin, Lockheed Martin’s RMS business could generate approximately $277 million in operating profit from this contract. In contrast, even maintaining Boeing’s current 3.1% margin on the $1.2 billion Apache order would yield roughly $37 million in profit—representing just 1.1% of Boeing’s $3.3 billion in total operating profit over the past twelve months.

Investors may find Lockheed Martin more attractive, as the company trades at 26 times earnings compared to Boeing’s 90 times trailing earnings multiple.

*Stock Advisor returns as of May 31, 2026.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

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