Defense industryQ1 defense industry financials offer grim picture

A snapshot of financials released in April from companies including General Dynamics, Lockheed Martin, and United Technologies paints a grim picture for defense industry quarterly revenue. The Strategy Analytics Advanced Defense Systems (ADS) service report, Defense Electronics Industry Review: April 2012, provides a review of significant defense industry news, including product announcements, milestones, contract activity and defense industry financial performance.

“On a positive note, the companies considered in this snapshot all achieved positive net income for the quarter,” noted Asif Anwar, director of the ADS service at Strategy Analytics. “However, budget cuts continue to overshadow the defense industry outlook and this was reflected in the financials being released for the first quarter of 2012.  The challenge will be maintaining profitability especially if quarterly revenues continue on the same trend.”

“Despite the sagging statistics, contract activity across platforms, systems and component technologies appeared to be robust,” observed Eric Higham, ADS Service director, North America. “Textron won the competitive MEUAS (Mid-Endurance Unmanned Aircraft Systems) II award and BAE Systems is upgrading Royal Saudi Air Force F-15S electronic warfare capabilities.”

Other April highlights included:

— ELTA Systems successfully demonstrated its new wideband LTE Tactical Communication Network — the TAC4G

— The continuing development of GaN technology capabilities for use in military systems, including contract awards to Raytheon, Rockwell Collins and TriQuint.

— Herley Industries’ international division, based in Israel, received an order for the production and supply of specialty microwave products for a new missile platform.