Mid-year earnings season for Aerospace & Defense has begun wrapping-up with nearly all major players reporting results. In a subset of about 30 major companies, roughly 80% beat earnings expectations and very few missed earnings.
Despite downward budgetary pressures and a contracted spending environment, services firms continue to seek new ways to return value to shareholders. Services firms are employing a range of techniques to accomplish this from the traditional growth drivers including M&A, to less common tactics like the distribution of dividends.
Merger and acquisition (“M&A”) activity in the commercial aerospace / business jet industry is in the midst of a several-year long, vibrant rebound. Through mid-August of 2012, acquirers announced 63 transactions of commercial aerospace suppliers. At that rate, the industry is on pace to total approximately 103 transactions for the full year 2012.
With sequestration continuing to loom, some members of Congress are working toward a compromise. Senators Lindsey Graham and Carl Levin have been working together within the Senate Armed Services committee in an attempt to delay defense cuts until May 2013.
On August 11, GOP presidential candidate, Mitt Romney officially introduced Paul Ryan as his vice presidential running mate, an announcement that all but ensures this year’s election will turn towards the deep philosophical divisions between the two parties views on spending, taxes, and entitlements.
Many cyber companies are diversifying portfolios from traditional roots in the defense industry to participate in Critical Infrastructure Protection, Fortune 500, and International markets, especially as many solutions are directly applicable to solve similar problem sets.
Frustration is mounting amongst government contractors as an elongated procurement cycle, contract delays / cancellations, and bid protests become commonplace in chasing Federal contracts.
Last week, the Association for Unmanned Vehicle Systems International (“AUVSI”) held its Unmanned Systems North America conference. The cadre of key players and industry authorities included acting FAA Administrator, Michael Huerta, whose remarks gave support to a potential boon for drone makers.