FARNBOROUGH, England, July 17 /PRNewswire/ -- Teal Group's Mid-Year
Market Briefs Report, released today during the opening of the 45th
Farnborough International Airshow, documents how much the U.S. aerospace
and defense industry's overall health continues to improve.
Principal Finding of New Teal Report
"Clearly it was a good year for the U.S. defense and aerospace
industry," said Teal Director of Corporate Analysis Philip Finnegan, who is
also lead analyst for Teal Group's Defense & Aerospace Companies Briefing,
the competitive intelligence service that evaluates some 50 key world
aerospace and defense companies, many of which are included in this latest
Market Briefs Report. (Further details may be obtained from sales
representatives whose contact details are listed at
http://www.tealgroup.com.)
* Revenues are continuing to increase, up 8 percent in 2005. Although
the lowest increase in three years, it remains a healthy growth rate.
Defense electronics companies such as Rockwell Collins Inc. and Harris
Corp. show 18-19 percent growth, almost entirely organic growth.
* Backlog bodes particularly well for future sales. It increased by
approximately $43 billion total, a 13 percent increase for the
15 companies included in the report. Yet the backlog increase
resulted entirely from Boeing's $51 billion boost in its backlog to
$160 million. "That rise in Boeing's backlog from commercial airliner
orders promises to maintain growth in U.S. aerospace even if defense
spending stalls over the next several years," said Finnegan.
* Profitability for 15 leading defense and aerospace companies is
increasing. Operating income from the group increased by 25 percent
to $20.8 billion. Operating income in 2004 was also up by a striking
30 percent to $16.7 billion.
* Operating profit margins for the group have been steadily increasing
from 5.8 percent in 2003 to 6.7 percent in 2004. And, in 2005 they
reached 7.7 percent. "Thus, in addition to the growth in revenues,
companies are achieving significantly higher profit margins.
* Debt Reduction has emerged as another benefit. Thus, with the rise in
profitability, aerospace and defense companies have been steadily
reducing their debt. After peaking at $52.5 billion for the group in
2003, it fell to $45 billion in 2004. And, in 2005, it further fell to
$41.5 billion.
* Debt-to-equity levels have also improved. The fall in debt and rise in
shareholder equity from the increased profitability of the group has
led to a decline in the debt-to-equity levels. The decline has been
fairly rapid from a peak of 76.l percent in 2002 to 43.1 percent in
2005.
* Company-funded research and development is growing although it is
holding steady as a percentage of sales. The 15 companies spent
$7.5 billion on company-funded research and development in 2005, up
11 percent from the previous year. As a percentage of sales it
increased slightly to 2.8 percent in 2005 from 2.7 percent the two
previous years.
The complete 2006 Teal Group Annual Market Briefs report, which was
prepared by Philip Finnegan and Natalie Heer, contains the following 12
separate, financial-trend documents each with separate bar charts and
tables covering the 15 leading world aerospace and defense companies in
each category: Revenues; Operating Income; Operating Margin; Net Income;
Long-Term Debt; Shareholder's Equity; Debt-to-Equity Ratio; U.S. Government
Sales; Reliance on U.S. Government Sales; Company-funded Research and
Development; Company-funded R&D as a Percentage of Total Revenues; and
Backlog.
This latest Teal Group Annual Market Briefs report has just been
provided to Teal Group clients in the latest monthly supplement to Defense
& Aerospace Companies Briefing and publicly released for the first time at
Farnborough 2006.
The Teal Group is an aerospace and defense market analysis firm based
in Fairfax, Virginia USA. It provides competitive intelligence to industry
and government worldwide.
SOURCE The Teal Group
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Related links:
http://www.tealgroup.com
CONTACT:
Philip Finnegan, Director of Corporate
Analysis, Mobile: +1-703-244-8533, Phone: +1-703-385-1992, x105,
pfinnegan@tealgroup.com
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