Industry Gung-Ho on Hypersonics Business.

Defense industry executives see hypersonic weapons as an increasingly lucrative business opportunity as the Pentagon pumps more funding into its initiatives.

Hypersonic missiles travel at speeds of Mach 5 or faster and are highly maneuverable. They provide commanders a quick-strike option, and pose a challenge for existing air-and-missile defense systems.

The weapons are the No. 1 technology priority of Undersecretary of Defense for Research and Engineering Mike Griffin. The Pentagon is trying not to lose ground to China and Russia, which are developing their own hypersonic capabilities.

In June, the Air Force, Army and Navy signed a memorandum of agreement for joint collaboration, and investment in new systems is expected to ramp up in the coming years.

In August, the Air Force awarded Lockheed Martin an undefinitized contract for a hypersonic air-launched rapid response weapon with a potential value of up to $480 million. Earlier this year, the service announced that Lockheed had been awarded a contract with a potential value of nearly $1 billion for an air-launched hypersonic conventional strike weapon prototyping effort.

Lockheed chairman, president and CEO Marillyn Hewson, has identified hypersonics as one of the company's "key providers of growth opportunities in the future." The firm's Skunk Works division will serve as a "vital incubator" for the technology, she said during a recent second quarter earnings call.

Meanwhile, Raytheon is nearing an agreement with the Defense Department to...