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It’s not very often that we cover financial news and our sector. But with all the news coverage surrounding the economic meltdown, this Forbes story certainly caught our attention. It seems that there will be tough times all around, but defense contractors should fare well in 2009 — and aerospace companies may have a tougher time.

“Global air traffic should decline in the first half of this year, and we believe deferrals driven by lower demand and financing challenges will cause narrowbody production rates to be cut by the end of the year,” said JP Morgan analyst Joseph B. Nadol III.

However, he did note that defense contractors should benefit given “high visibility on sales growth in 2009 and into 2010 due to strong investment account budget increases, and while non-cash pension expense will rise materially for some companies, they otherwise should produce strong growth in earnings and free cash flow.” In addition, in terms of stock picks he chose Northrop Grumman and Raytheon.

Meanwhile, Boeing just sealed its first big deal in India with the sale of eight P-8I long-range maritime reconnaissance and anti-submarine planes.

Tags: Boeing, Defense Contractors, Northrop Grumman, Raytheon