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Healthy Defense Industry Activity Marred by Lackluster Revenues
Streamlining efforts helping to maintain profitability
Boston, MA - May 13, 2013 - Ongoing activity in March and April included mergers and acquisitions, product launches and milestones, as well as seemingly healthy contract activity, but financials continue to emphasize the difficulties faced by the defense industry. Strategy Analytics Advanced Defense Systems (ADS) service reports, "Defense Electronics Industry Review: March 2013," and "Defense Electronics Industry Review: April 2013," detail significant defense industry news, including product announcements, milestones, contract activity and defense industry financial performance as the first quarter of 2013 came to a close.
Taking a snapshot of financials from companies including Boeing, Lockheed Martin, Northrop Grumman, Raytheon and United Technologies, revenues were by and large flat for most companies for the first quarter of 2013. The defense industry continues to focus on streamlining operations and ensuring profitability as revenue growth slows, stagnates or declines.
"Taking a look at 2013 first quarter financials compared with the year-ago quarter really demonstrate the impact that budget cuts are starting to have on the defense industry," noted Asif Anwar Director of the ADS service at Strategy Analytics. "While revenues stayed on a par with the prior year, most company outlooks point to full-year revenues as purchases are offset and uncertainty around future expenditure remains."
However, revenues are not the whole story and activity around contracts, business tie-ups, product launches and milestones remained robust over March and April. March saw several key systems passing tests such as the Northrop Grumman AN/TPS-80 Ground/Air Task Oriented Radar (G/ATOR) and Raytheon testing a dual-band datalink with a Thales Nederland Advanced Phased Array Radar (APAR).
"The competition to upgrade fourth generation fast-jet platforms with fifth generation capabilities such as active electronically scanned array (AESA) radar is also starting to heat up with offerings from Raytheon and Northrop Grumman," observed Eric Higham, ADS Service Director North America.
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