Aerospace system and service suppliers warn of a difficult six months as falling commercial aircraft deliveries exacerbate the slump in after-market sales since 11 September.
Goodrich saw aerospace sales grow 13% in 2001, to $4.2 billion, but expects revenues to be 5-10% down this year on lower aircraft deliveries and a decline in after-market sales of more than 10%.
The company's after-market sales fell 10% in the fourth quarter and, although higher military sales helped boost overall aerospace revenues almost 10%, new orders for commercial aircraft, original equipment and after-market products were down significantly.
Goodrich incurred $200 million in charges last year by restructuring its aerospace business, including reducing investment in the Boeing 717 and Super 727 re-engining programme - which is expected to generate annual savings of around $125 million.
Honeywell incurred fourth-quarter charges of $540 million - $440 million to settle the Litton patent infringement case and $100 million in costs related to BAE Systems' cancellation of the Honeywell AS907-powered Avro RJX. Charges for the full year totalled almost $2.8 billion, including restructuring expenses following the blocked merger with General Electric. Aerospace sales for 2001 were down just over 3% to $9.7 billion, but Honeywell says aggressive cost cutting has opened the way for a rapid recovery if the US economy recovers as forecast.
Sales in TRW's Aeronautical Systems business were unchanged at $1.1 billion in 2001, but, in common with other equipment suppliers, it has suffered reduced operating profits since 11 September. Canadian simulator supplier CAE, meanwhile, saw its strategic move into aviation training beginning to pay off towards the end of 2001, with overall earnings for the quarter increasing 45% year-on-year. Military simulation sales increased, but the company anticipates a significant drop in commercial simulator orders this year.
Source: Flight International
