Making the most of a burgeoning commercial market and still-strong defence sales, US aerospace companies have reported higher revenues, and even bigger gains in profits, for the year just ended. While firms with predominantly commercial businesses are projecting substantial revenue hikes for 2006, most companies expect higher profit margins this year as cost-cutting during the downturn pays off.
Reporting revenues up 5% to $54.8 billion last year, Boeing is forecasting sales of around $60 billion this year and $63.5-64.5 billion in 2007. While much of the increase will come from higher commercial aircraft deliveries, the company expects its defence business to contine growing at 2-5% over the next two years.
Lockheed Martin, the largest US defence contractor, saw sales increase last year by just under 5% to $37.2 billion, while profits grew 44%. The company is projecting 2-6% revenue growth for this year.
Northrop Grumman’s profits increased by 29% on revenues up 3% to $30.7 billion, with sales expected to remain flat next year while profitability increases further.
Raytheon’s profits jumped by 109%, on revenues up 8% to $21.9 billion – just staying ahead of consistently profitable General Dynamics, whose sales grew 11% to $21.2 billion in 2005. Increased business aircraft sales benefited both manufacturers.
Buoyed by commercial engine and equipment sales, General Electric’s Aviation unit saw revenues grow 7% to $11.9 billion; United Technologies’ aerospace businesses – Hamilton Sundstrand, Pratt & Whitney and Sikorsky – grew 12% to $16.5 billion; and Honeywell Aerospace was up almost 8% at $10.5 billion.
GRAHAM WARWICK / WASHINGTON DC
Source: Flight International