Lockheed Martin continues to be the world's largest defence company by sales. It earned $37.5bn (£24.8bn, €34bn) in 2014 from the defence industry, according to the Stockholm International Peace Research Institute.
Boeing was the next largest in the list followed by BAE Systems. Other companies that made it to the top 10 list include Raytheon, Northrop Grumman, General Dynamics, the Airbus Group, United Technologies, Finmeccanica and L-3 Communications.
Sipri's report highlights that the defence industry continues to be dominated by American and European players, with firms from these countries taking up the top 10 positions.
While the institute does not rank Chinese defence companies, it estimated that China's aircraft manufacturer AVIC and land systems producer Norinco would make it to the top 10 if reliable information on them was available. This reflects Beijing's increasing focus on military power and efforts to develop its domestic industry in the backdrop of its fivefold increase in military expenditure since 2000.
The combined sales of the world's 100 largest arms companies dropped by 1.5% to $401bn in 2014 due to spending cuts for the fourth year running. Sipri attributed this decline mainly to American and Western Europe defence companies, where government buyers are facing budget constraints.
Lockheed Martin was, however, one of the few large players that bucked this trend. It saw an increase of 3.9% in its 2014 arms sales from 2013.
Aude Fleurant, director of Sipri's arms and military expenditure programme, said the Maryland, US, headquartered defence company was likely to increase its lead over other defence players. "With the acquisition of helicopter manufacturer Sikorsky Aircraft in 2015, the gap between Lockheed Martin and other companies ranked in the top 10 will widen even further next year," he added.
Also acting in favour of the company is the $1tn defence project to build the F-35 Joint Strike Fighter. Lockheed heads this consortium which is the world's biggest-ever single defence project.