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Chinese officers check rifles of ARES Defense Systems, Inc from the U.S. at the opening of the Special Operations Forces Exhibition and Conference (SOFEX) at King Abdullah I Airbase in Amman May 8.

Ali Jarekji / Reuters

Jordanian special forces take part in a drill during a parade at the opening of the Special Operations Forces Exhibition and Conference (SOFEX) at King Abdullah I Airbase in Amman May 8.

Khalil Mazraawi / AFP - Getty Images

Fire billows from explosions during a military display by Jordanian special forces at the opening of the Special Operations Forces Exhibition and Conference (SOFEX) at King Abdullah I Airbase in Amman on May 8. The exhibition showcases the latest technologies by defence manufacturers around the world.

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A delegation official examines a gun during the 9th Special Operations Forces Exhibition and Conference (SOFEX) May 08, 2012 in Amman, Jordan. SOFEX brings together the defense industry and government and military leaders to investigate innovations in special operations technology and tactics.

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The F-22 Raptor is among the many military products made by Lockheed Martin

Global sales of arms and military services by the 100 largest defense contractors increased in 2010 to $411.1 billion, according to the Stockholm International Peace Research Institute. The increase reflects a decade-long trend of growing military spending. Since 2002, total arms sales among the 100 largest arms manufacturers have increased 60 percent.

The institute recently published its annual report on the leading arms producing companies in the world -- SIPRI Top 100. The report identifies the largest companies in the sector and provides each company’s arms sales as a percentage of its total sales. Based on the report, 24/7 Wall St. identified the 10 companies with the highest revenue from arms sales. These companies alone account for $230 billion -- over half of all arms sales that year.

While many industries continued to suffer in 2010 as a result of the financial crisis, leaders in the arms and military services were largely unaffected. According to SIPRI arms industry expert Susan Jackson, when sales dropped, it was not because of the financial crisis. Instead, Jackson notes that loss in sales was due to “the withdrawal of foreign troops from Iraq and the subsequent expected decrease in related equipment sales.”

The composition of the 10 largest manufacturers reflects the state of modern warfare. More and more, battles are fought remotely through air surveillance and strikes rather than on-the-ground combat. As a consequence, seven of the 10 largest companies are among the leading aerospace companies. Surveillance and battlefield communications also are increasingly important in modern warfare. All of the companies in the top 10 have significant electronics divisions.

Of the 100 companies on the list, 44 are based in the U.S., including Boeing, Northrop Grumman and Lockheed Martin. The American companies account for more than 60 percent of arms sales revenue of the 100 manufacturers. Seven of SIPRI’s top 10 are American, one is British, one is Italian and one is a multinational EU conglomerate. The U.S. federal government has contract deals with all seven American companies. These seven are among the top 10 U.S. federal contractors by amount procured, according to the government’s Federal Procurement Data System.

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24/7 Wall St.’s analysis of the SIPRI 100 includes revenue for arms sales for 2007, 2009 and 2010, as well as percentage of company revenue from arms sales, employees, industry and applicable military division. 24/7 Wall St. also included history of each company and notable weapons systems manufactured.

These are the companies profiting most from war.

1. Lockheed Martin 

• Arms sales 2010: $35.73 billion
• Total sales 2010: $45.80 billion
• Arms sales as pct. of total sales: 78 percent
• Total profit: $2.93 billion
• Total employment: 132,000
• Sector: Aircraft, Electronics, Missiles, Space

Lockheed Martin is the largest arms-producing and military services company in the world, with nearly $3 billion more in arms sales than second place BAE Systems. Although military sales make up the majority of its revenue, it is significantly less than many other major arms-producers, including BAE’s 95 percent share. In addition to being the world’s largest arms-seller, Lockheed is also the largest federal contractor in the U.S. by a large margin. In 2010, the company’s government contracts totaled nearly $36 billion. Lockheed produces a number of major products, including the Trident missile and the F-16 and F-22 fighter jets. Despite being the largest military service company on this list, Lockheed is only the fourth-largest company by overall sales among the companies featured on this list. In 2007, the Lockheed was the third-largest arms producer.

2. BAE Systems

• Arms sales 2010: $32.88 billion
• Total sales 2010: $34.61 billion
• Arms sales as pct. of total sales: 95 percent
• Total profit: $1.67 billion
• Total employment: 98,200
• Sector: Aircraft, Artillery, Electronics, Missiles, Military vehicles, Small arms/ammunition, Ships

BAE Systems is an aerospace and defense contractor based in the UK. The company has a major U.S. subsidiary, BAE Systems, Inc., which by itself would be the seventh-largest weapons manufacturer in the world. The British company was formed in 1999 through the merger of Marconi Electronics (which was at the time a subsidiary of GE) and British Aerospace. BAE produces weapons systems in nearly every major military category, including aircraft, defense electronics, vehicles, naval vessels and small arms. Among the company’s notable contributions are the M2/M3 Bradley fighting vehicle, the F-35 Joint Strike Fighter, the Type 45 destroyer and the Astute-class nuclear submarine. In 2010, 95 percent of its revenue came from arms sales, $32.88 billion in all.

3. Boeing 

• Arms sales 2010: $31.36 billion
• Total sales 2010: $64.31 billion
• Arms sales as pct. of total sales: 49 percent
• Total profit: $3.31 billion
• Total employment: 160,500
• Sector: Aircraft, Electronics, Missiles, Space

As recently as 2007, Boeing was the largest arms producer in the world. By 2008, it had fallen behind Lockheed Martin and U.K.-based BAE Systems. The aerospace and defense company remains one of the largest in the world, however. Boeing is the second-largest aircraft producer in the world by deliveries, behind only Airbus. It is also the second-largest U.S. government contractor, procuring just under $19.5 billion in contracts in 2010. Major products produced by the company include the KC-767, an aerial refueling tanker, and the F-15 fighter jet. Boeing made less in arms sales in 2010 than it did in 2009, although arms sales made up a larger amount of total sales -- two percentage points, to be exact -- in 2010 compared to 2009. Even in 2010, however, only 49 percent of revenue came from arms sales, which is among the lowest rates among companies on this list.

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4. Northrop Grumman 

• Arms sales 2010: $28.15 billion
• Total sales 2010: $34.76 billion
• Arms sales as pct. of total sales: 81 percent
• Total profit: $2.05 billion
• Total employment: 117,100
• Sector: Aircraft, Electronics, Missiles, Ships, Space

Northrop Grumman is the fourth-largest weapons contractor in the U.S. The company, which is based in Falls Church, Va., is one of the leaders in aerospace technology and the leading producer of naval vessels in the world. The company manufactures Nimitz-class carriers that are the current flagships of the U.S. Navy. And over the next few years it is also set to build the new, $9.7 billion Gerald R. Ford-class supercarriers. Northrop Grumman also develops radar systems for aircraft and ground defense, sensor systems for a variety of vehicles and several unmanned aircraft and drones. Weapons systems sales accounted for 81 percent of company revenue in 2010. Arms sales grew by approximately $3.5 billion between 2007 and 2010.

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5. General Dynamics

• Arms sales 2010: $23.94 billion
• Total sales 2010: $32.47 billion
• Arms sales as pct. of total sales: 74 percent
• Total profit: $2.62 billion
• Total employment: 90,000
• Sector: Artillery, Electronics, Military vehicles, Small arms/ammunition, Ships

General Dynamics is an American defense company that deals in aerospace, combat systems, information systems and technology, and marine systems. Although the company has been around since 1952, it has enjoyed a resurgence beginning in the 1990s, thanks largely to a number of mergers. Since 1997 General Dynamics says it has acquired more than 50 companies. Over this same period, its revenue increased from $4 billion to more than $32 billion. It also added more than 60,000 employees to its workforce. Currently, 74 percent of the company’s sales are arms sales. General Dynamics owns Electric Boat and Bath Iron Works, two of the largest naval vessel builders in the world. General Dynamics is notable known for its Ohio-class ballistic missile submarine, the Seawolf-class submarine, the M1 Abrams tank and the Arleigh-Burke-class destroyer.

Click here to read the rest of the companies profiting the most from war.

Should the United States blink with Iran? Tehran has warned Washington against returning an aircraft carrier to the Persian Gulf. The White House contends Tehran’s threat is just an attempt to deflect attention from the Islamic republic’s domestic problems and says the Navy will continue operations in the Gulf.

What happens next?

We turned to Graham T. Allison, a leading analyst of U.S. national security and defense policy in nuclear weapons and terrorism at Harvard, and Qamar-ul Huda, a scholar of Islam and theology, from the U.S. Institute of Peace. In emails to msnbc.com, they shared some thoughts on Iran's war of words -- and the possibility of an escalation.

Belfer Center

Graham T. Allison of the Belfer Center.

Iran has threatened to take military action if the U.S. keeps sending aircraft carriers into the Gulf. What is the probability Iran would make good on its threat?

ALLISON: Low. Iran must be aware that the U.S. will continue to send aircraft carriers into international waters regardless of Iranian threats, and that any direct military confrontation would not end well for Tehran. However, we face the risk of unauthorized or low-level skirmishes between U.S. and Iranian naval forces escalating into a broader conflict. 

HUDA: In March 2007, Iran captured 15 British sailors and marines from the Strait of Hormuz, and the government allowed the British embassy to be ransacked by protesters. Since the November 2011 United Nations report found that Iran has worked and may be working on attaining nuclear weapons, the United States and its allies are pressing harder to enforce sanctions against Iran. Essentially, relations with Iran have gone from bad to worse in a matter of five months.

Courtesy Qamar-ul Huda

Qamar-ul Huda of the U.S. Institute of Peace.

If the recent past is any indicator of events, Iran's threats must be taken seriously. A military attack by Iran against the U.S. would have a devastating strategic consequence for Iran. About less than 25 percent of U.S. imported oil comes from the Gulf region; however, China's oil supplies would be significantly threatened by a military conflict.

Iran's threats are not only directed at the U.S., but to the already unstable global economy. With the uncertainty of EU financial industry and U.S.'s weak economy, Iran is using this moment to test Western interests in the region.

What does Iran have to gain from a military confrontation with the U.S.?

ALLISON: It is certainly not in the rational self-interest of the Iranian state to provoke a confrontation with America, whose military dwarfs that of Iran. However, it is likely that certain elements within the regime would welcome such a confrontation, as they feel that American military action could bolster support for their government and distract the Iranian people from growing economic problems.

HUDA: Iran's military confrontation with the U.S. allows them to rein in dissenters, reformers and liberals, and embolden the power of the hardliners in Iran, namely the Revolutionary Guard institutions. Iranian hardliners welcome an escalation of conflict with the U.S. and the West because it allows them to consolidate their internal power. The elite of hardliners are still from the 1979 revolution period, and they understand that an anti-Western narrative is their core asset. With the recent shooting down of a U.S. spy drone near the Iran-Afghanistan border, and the capture of an [alleged] Afghan-American spy in Iran, Iranian hardliners in the government are trying to deflect the nuclear issue and simultaneously make a case of preventing a U.S.-led confrontation. Internally, Iran is using recent political events, including the Arab Spring protests, as justification to defend national sovereignty.

Iran has purchased from the Chinese and Russians sophisticated midget submarines, mobile anti-ship cruise missiles, and a fleet of small fast boats capable of naval warfare. Knowing their asymmetric  military power, and visible soft power in the Middle East, Iran will promptly leverage their power against Western interests.  

What does the U.S. have to gain from a military confrontation with Iran?

ALLISON: Although some argue that U.S. military action against Iran would be a relatively painless way to delay its nuclear program and maybe even inspire a popular uprising, my best judgment is that an attack is as likely to advance the date on which Iran tests a bomb as to delay it. A military confrontation with Iran would also overturn the chessboard in the Middle East, making America (and Israel) the issue for most of the people in the street and risk retaliation that could bring about a wider regional war. 

HUDA: The U.S. maintains that their military exercises are according to international maritime conventions and for the security of the region. By moving forward to counteract Iranian threats, the U.S. reassures their allies of their commitment to the region, and more importantly, it bolsters the U.S.-Gulf states alliance of limiting Iranian aggression. While a military escalation with Iran will lead to a deeper cold war with Iran, there is no other way to ensure that Iran will draw back. 

Allison is the director of the Belfer Center for Science and International Affairs at Harvard's John F. Kennedy Center of Government. For three decades, he has been a leading analyst of U.S. national security and defense policy with a special interest in nuclear weapons, terrorism and decision-making. He served as assistant secretary for The U.S. Department of Defense in the first Clinton Administration.

Huda is a senior program officer in the Religion and Peacemaking Center and scholar of Islam at U.S. Institute of Peace. He teaches conflict resolution, Islamic theology, Islam and Western studies at Georgetown University.

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