Obama Steps Up to the Plate Against North Korea’s Nuclear Threats: Lockheed Martin Corporation (LMT), Northrop Grumman Corporation (NOC), The Boeing Company (BA)

For a while now, I’ve written about how the threats coming from North Korea are a benefit for missile defense, and defense companies. On Friday, that theory was proved correct as the Obama administration announced that it’s beefing up missile defense, even though sequestration has gone into effect. Here’s what you need to know.

Launch of a Standard Missile-3, 2008. Source: Missile Defense Agency.

When Barack Obama took office in 2009, he stopped the deployment of intercontinental ballistic missile interceptors, which left the total number at 30. However, with escalating threats from North Korea, and the report that North Korea it has advanced its missile capabilities, the Obama administration has reinstated the Bush administration’s missile defense plan. That means missile interceptors will grow to a total of 44.

The additional interceptors are projected to boost the United States’ missile defense capabilities by 50% and cost an estimated $1 billion. James Miller, defense undersecretary for policy, said that when North Korea launched a satellite into space, it demonstrated “its mastery of some of the same technologies required for development of an intercontinental ballistic missile.” He also stated: “Our concern about Pyongyang’s potential ICBM capability is compounded by the regime’s focus on developing nuclear weapons. North Korea’s third nuclear test last month is obviously a serious concern for all nations.”

Miller also said the increase in interceptors is meant to keep ahead of the growing threat coming from North Korea, and Iran, as the U.S. has to be able to counter multiple missile threats. Furthermore, Defense Secretary Chuck Hagel announced that the U.S. is looking to add a second ballistic missile radar instillation in Japan and that the U.S. will be shifting “resources” to boost funding to Lockheed Martin Corporation (NYSE:LMT)‘s Aegis Missile defense system.