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China | Corporate Financials | Daily Rapid Fire | Finmeccanica | India | Raytheon | Scandals & Investigations | USA

Rapid Fire April 26, 2013: Decent Quarter for Primes Shouldn’t Hide Industry Diversity

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* Raytheon’s Q1 2013 sales were down by 1% Y/Y to %5.88B. The backlog lost 2.2% from a year ago, to $33.5B. Missile systems performed best (+8%) while network centric systems decreased by 7%. * Overall US prime contractors had an OK quarter, and they now acknowledge that sequestration will take time to sink in. On the other hand companies focused on selling relatively mundane services to the Department of defense are facing a tougher outlook. * Pentagon acquisition chief Frank Kendall finalized [PDF] his Better Buying Power 2.0 directive. The call to action: “All ACAT I – III programs should have should cost targets in place by August 1, 2013, or the next milestone decision, whichever comes first.” * Frank Kendall also wants to search for overlap between programs and reduce product redundancy. A recent consolidation example can be found in the Project Manager, Night Vision/Reconnaissance, Surveillance, and Target Acquisition (PM NV/RSTA) canceling a planned industry day for its Gunshot Detection System (GDS), redirecting instead to the Hostile Fire Detection (HFD) effort from RDECOM CERDEC Night Vision and Electronic Sensors Directorate (NVESD). * The US National Defense University’s INSS research arm published a paper on Chinese threat and retaliation […]

* Raytheon’s Q1 2013 sales were down by 1% Y/Y to %5.88B. The backlog lost 2.2% from a year ago, to $33.5B. Missile systems performed best (+8%) while network centric systems decreased by 7%.

* Overall US prime contractors had an OK quarter, and they now acknowledge that sequestration will take time to sink in. On the other hand companies focused on selling relatively mundane services to the Department of defense are facing a tougher outlook.

* Pentagon acquisition chief Frank Kendall finalized [PDF] his Better Buying Power 2.0 directive. The call to action: “All ACAT I – III programs should have should cost targets in place by August 1, 2013, or the next milestone decision, whichever comes first.”

* Frank Kendall also wants to search for overlap between programs and reduce product redundancy. A recent consolidation example can be found in the Project Manager, Night Vision/Reconnaissance, Surveillance, and Target Acquisition (PM NV/RSTA) canceling a planned industry day for its Gunshot Detection System (GDS), redirecting instead to the Hostile Fire Detection (HFD) effort from RDECOM CERDEC Night Vision and Electronic Sensors Directorate (NVESD).

* The US National Defense University’s INSS research arm published a paper on Chinese threat and retaliation signaling and its implications for a Sino-American military confrontation [PDF].

* Two problems with India’s pursuit of alleged corruption in its AW101 VVIP helicopter deal. First, despite all the threats and legal strikes, they haven’t found anything yet. Botched artillery acquisitions have shown this doesn’t necessarily stop the ministry from blacklisting firms anyway, but pulling that on Finmeccanica would be a serious problem for India’s Navy and IAF. The 2nd problem: they’re about to run out of flyable VVIP helicopters.

* What does US Chief of Naval Operations Admiral Greenert mean when he talks about a “kill chain”? His quick explanation in the video below. This perspective was already showing a few years ago in guidance [PDF] from his predecessor Gary Roughead.

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