US Defense Firms Report Q4 2006 and Year-End Results
Yes, it’s that time again. Obviously, the results below are extremely brief, and we’ve now added Boeing and Raytheon. Full statements and figures can be found at each of the linked URLs:
- Boeing Company. Boeing’s overall revenue rose 15% to $61.5 billion reported and earnings were up 7% to $3.014 billion, but a slight decline in operating margins dropped reported net income by 14%; on the other hand, record operating cash flow of $7.5 billion offers strong liquidity, and commercial aircraft sector sales, backlog, et. al. remain very strong. Boeing’s stock price rose after the release. Boeing Integrated Defense Systems (IDS) also had its ups and downs; revenues were up 4% to a record $32.4 billion, but problems with its 737 AEW&C program and associated penalties in Turkey and Australia were visible on the bottom line. While Boeing IDS operating margins absent divestitures were higher in 2006 than 2005, the hit to “Precision Engagement & Mobility Systems” dropped the 2006 figure to 9.3% vs. 12.6% in 2005 (including divestitures) despite gains from F-15 fighter sales and H-47 helicopter contracts. Network and Space Systems saw a 2% revenue decrease and 32% earnings decrease from 2005, while Support Systems which includes the C-17 GSP and other offerings was the only solid winner with revenues up 14% and earnings up 9%. See Q4/2006 results release [PDF format] | Webcast | Financial Slide Presentation [PDF format].
- General Dynamics. Earnings from continuing operations for 2006 grew by 18.1% to $1.71 billion, or $4.20 per share on a fully diluted basis, compared with earnings of $1.45 billion ($3.58 fully diluted) in 2005. Revenue for the full year of 2006 increased 14.7% to $24.1 billion, compared with $21 billion for 2005.
- Lockheed Martin. Net earnings for the year ended December 31, 2006 were $2.5 billion ($5.80 per share), compared to $1.8 billion ($4.10 per share) in 2005. Net sales were $39.6 billion, up 6% from $37.2 billion. Cash from operations was $3.8 billion, and Return on Invested Capital (ROIC) was 19.2% compared to 14.5% in 2005.
- Northrop Grumman. Income from continuing operations for 2006 rose 13% to $1.6 billion ($4.44 per diluted share), from $1.4 billion ($3.83 per diluted share) in 2005. Sales for 2006 were comparable to 2005. Net income for 2006 rose 10 percent to $1.5 billion ($4.37 per diluted share), from $1.4 billion ($3.85 per) in 2005. Total operating margin for 2006 increased 12% to $2.5 billion from $2.2 billion, driven by higher operating margin in all 4 of the company’s businesses, and double-digit percentage increases in Information & Services and Ships operating margin.
- Raytheon: Total 2006 net sales were $20.3 billion, up 7% from $19.0 billion for 2005. In 2006, net income rose 47% to $1.283 billion ($2.85 per diluted share) vs. $871 million ($1.92 per diluted share) in 2005. Improved operating results at Integrated Defense Systems, Missile Systems and Network-Centric Systems combined with lower net interest expense and a reduction in pension expense, brought income from continuing operations up 35% to $1.107 billion ($2.46 per diluted share) compared to $818 million ($1.80) in 2005. Net income for 2006 included $176 million of income from discontinued operations, and Raytheon’s sales of its civil aircraft division was factored in to the way it reported its results, as well as the results themselves. See release for details.