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TOP CONTRIBUTORS

The term "Aerospace & Defense" is a generic term that encompasses several different industries: The major companies as seen on the right manufactures both commercial and military aircrafts. Boeing Company (NYSE:BA) is the world's largest aerospace and defense company. The company operates in over 90 countries and claims the title of America's largest aerospace manufacturing company. Its has three divisions: commercial airplanes, Integrated Defense Systems (IDS), and Boeing Capital Corporation[1] Of the three divisions, the most prominent is the commercial airplane section. This division faces intense competition from EADS NV (EADSY) and its Airbus line of planes.

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Companies Overview

The Aerospace & Defense industry portal delivers latest information to professionals working in government, businesses and private companies involved in research, development, production, and service to commercial and military equipments and facilities. Our content target the following audience such as:

  • Commercial clients and business owners around the world.
  • Defense contractors: business organizations or individuals that provide products or services to a defense department of a government.
  • The Arms industry, which produces guns, ammunition, missiles, military aircraft, and their associated consumables and systems.
  • Private military contractors: private companies that provide logistics, manpower, and other expenditures for a military force.
  • Defense procurement.

Boeing Company (BA)

Headquartered in Chicago, Illinois, Boeing was originally founded in the 1910s in Seattle, Washington. After a series of mergers and splits (in which today's United Airlines was spun out, among others), Boeing emerged in the fifties as the premier US aircraft manufacturer, participating heavily in government air defense projects. It was not until 1958 that Boeing began delivery of its first commercial airplanes, the segment for which it is most commonly recognized today.

Honeywell International (HON)

Honeywell's $31 billion revenue places it amongst the largest companies in the world. Sales in the US constitute 61% of revenue, but Honeywell's international business has been growing rapidly.

Lockheed Martin (LMT)

is one of the world's largest defense contractor by revenue.[2] As a manufacturer of primarily electronic, information, aeronautic, and space systems, LMT has benefited from the increased defense spending that has accompanied the Afghan and Iraq War.

United States government spending typically represents about 85% of Lockheed Martin's revenue.[3] As a result, the company is sensitive to political changes that impact federal government spending priorities. Historically, Republican political victories have benefited Lockheed Martin through increases in defense spending.

Aeronautics is engaged in the research, design, development, manufacture, integration, sustainment, support, and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies.

In 2010, net sales at Aeronautics of $13.2 billion represented 29% of our total net sales. Aeronautics has three principal lines of business, and the percentage that each contributed to its 2010 net sales was:

General Dynamics (GD)

The company earnings in 2009 was $32 billion in revenue and $2.4 billion in net income.
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With three-quarters of GD's sales coming from the US government,[3] GD relies heavily on the U.S. Department of Defense (DoD) budget spending. The DoD budget is rather cyclical, but the war in the Middle East and the military's need to replace Cold War equipment has helped increase defense spending over the past few years. During 3rd Q of 2011, GD experience a fall in net income by 9.3% due to sluggish economic, reduction of equipments and energy costs with an impact on environmental atmosphere due to carbon emissions.

Raytheon Company (RTN)

The United States government is Raytheon's principal customer, accounting for nearly 80% of total sales. Such heavy reliance on one source for income is softened by the company's strong diversification in small contracts; the loss of one program would not significantly affect the company's business.

Goodrich Corporation (GR)

This segment manufactures and produces flight controls, helicopter's main and tail rotors, complete landing gear systems (including wheels and brakes), fuel controls, electrical systems, surveillance systems, and provide maintenance and repair services associated with aircraft engines and aircraft interior products.

Northrop Grumman (NOC)

Northrop Grumman Corporation (NYSE:NOC) is the world’s third largest defense contractor; it manufactures aircraft carriers, submarines, space craft systems, mission-critical computer systems, and wireless communications infrastructure; about 90% of its revenue comes from the U.S. Department of Defense (DoD). The company is currently based out of Los Angeles, CA, but is scheduled to move to Falls Church, VA.[4]

Business and Financial Metrics

  • Revenue: Boeing's revenue has decreased from $68.28 billion in 2009 to $64.31 billion in 2010. The revenue decrease is attributed to various factors such as a decline in airline demand and negative publicity associated with the multiple delays of the 787 Boeing Dreamliner.[5] For the first half of 2011, revenues increased 2% from $30.79 billion in 2010 to $31.45 billion.[6]
  • Net Income: Boeing's net income has increased from $1.31 billion in 2009 to $3.31 billion in 2010. Most of this more than 250% increase in net income comes from streamlining and efficiency procedures implemented by Boeing.[5] For the first half of 2011, net income increased 17% from $1.31 billion in 2010 to $1.53 billion.[6]

Data Trend and Forces

Boeing Corporation is set to continue rolling out most of it's Carolina dreamliner productions due to positive revenue of 135.6% from 2010 annual reading compared to most competitors. This will in turn generate profitable net income through 2013.

Data Metrics

The valuation of volatiled [7]indices ranges from trending supplemented variables which has continuously enforce bias to brokerage firms to relay on forcasting strong recovery during mid quarter of 2012.

Competition

For comparison purposes, here are the FY2010 revenues findings these aerospace corporations.

Company FY2010 Net Profit Margin FY2010 Operating Margin FY2010 EBITD Margin Return on Average Equity Biggest Division
Boeing Company(BA)[15] 5.15% 7.73% 9.36% 135.31% Civilian Aircraft
Honeywell International(HON)[16] 6.1% 9.4% 12.6% 23% Electronic Systems on Aircraft
Lockheed Martin(LMT)[17] 5.77% 8.94% 11.11% 67.50% Electronic Systems
General Dynamics (GD)[18] 8.09% 12.15% 13.90% 20.42% Information Systems and Technology
Raytheon Company (RTN)[19] 7.32% 10.35% 11.56% 18.43% Space and Airborne Systems
Goodrich Corporation (GR)[20] 8.39% 14.35% 17.36% 23% Actuation and Landing Systems
Northrop Grumman (NOC)[21] 5.86% 8.83% 10.85% 15.5% Electronic Systems



References

  1. Wikinvest SEC Files: BA 2009 10-K, Item 8
  2. LMT 10-K FY2010, Pg 2
  3. Lockheed Martin 2010 Form 10-K, Page 1
  4. NOC 10-k FY2010, Pg 2
  5. 5.0 5.1 Wikinvest SEC Files: Boeing 2010 10-K, Item 8, The Boeing Company and Subsidiaries Consolidated Statements of Operations
  6. 6.0 6.1 Boeing Company New Release - Second Quarter 2011 Earnings
  7. Company(RTN)/Data/Key_Metrics| Raytheon Key Metrics
  8. Google Finance, "The Boeing Company"
  9. Google Finance, "Honeywell International"
  10. Martin Google Finance, "Lockheed Martin"
  11. Dynamics Google Finance, "General Dynamics"
  12. Company Google Finance, "Raytheon Company"
  13. Corporation Google Finance, "Goodrich Corporation"
  14. Grumman Google Finance, "Northrop Grumman"
  15. [1]
  16. [2]
  17. [3]
  18. General Dynamics Financials
  19. Raytheon Financials
  20. [http://www.reuters.com/finance/stocks/ratios? rpc=66&symbol=RTN Raytheon Financials]
  21. Northrop Grumman Financials
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