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Zacks Industry Outlook Highlights: Lockheed Martin, Boeing, General Dynamics, Raytheon and Northrop Grumman
By: PR Newswire
Dec. 27, 2012 09:30 AM
CHICAGO, Dec. 27, 2012 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Aerospace & Defense, including Lockheed Martin Corporation (NYSE:LMT), The Boeing Corporation (NYSE:BA), General Dynamics Corporation (NYSE:GD), Raytheon Company (NYSE:RTN) and Northrop Grumman Corporation (NYSE:NOC).
A synopsis of today's Industry Outlook is presented below. The full article can be read at
The big defense operators armed with strong balance sheets are expanding their operations inorganically through acquisitions. The U.S. Defense department also endorses mergers among U.S. defense companies, provided they don't involve the top five or six suppliers acquiring each other. For that matter, the industry encourages acquisitions as the highest-priority investment area for a company with a sizeable cash balance looking for growth amid significant defense budget cuts.
In fact, the four main strategies to stimulate that growth are joint ventures, foreign military sales, international expansion and mergers and alliances.
Recently, Lockheed Martin Corporation (NYSE:LMT) announced the acquisition of Chandler/May Inc., an unmanned aerial systems manufacturer. Lockheed Martin's prudent acquisition of Chandler/May would expand its expertise in the design, development, integration, manufacturing and support of fully integrated mission critical systems for unmanned aerial systems ("UAS") and Command, Control, Communications, Computers, Intelligence, Surveillance, Reconnaissance ("C4ISR") missions. Lockheed would leverage the expertise of Chandler/May Inc. to carry out the October contract for Coast Guard Super Hercules C4ISR planes.
The Boeing Corporation (NYSE:BA) recently completed the acquisition of Miro Technologies. Miro is a privately held software company that specializes in enterprise asset and supply chain management; MRO services; and Performance-Based Logistics ("PBL") management for government and commercial customers worldwide. This acquisition would bolster the company's defense logistics support strategies. Prior deals made by the company include acquisition of Tapestry Solutions, Federated Software Group, and CDM Technologies.
In December this year, General Dynamics Corporation (NYSE:GD) completed the acquisition of Applied Physical Sciences Corp. of Groton, Connecticut. Applied Physical Sciences is a leading provider of applied research and development services. It will become a part of General Dynamics Electric Boat and help in various engineering programs.
Again in December, Raytheon Company (NYSE:RTN) completed the acquisition of the Government Solutions business of SafeNet Inc. for an undisclosed amount. The need for acquiring a privately held data security firm comes in the light of supporting the U.S. government's growing need for protected and encrypted data. In October 2012, Raytheon had also completed the acquisition of Teligy, Inc. that has improved the company's cybersecurity offerings in wireless communications, vulnerability analysis, reverse engineering and custom kernel software/device driver development.
In September, Northrop Grumman Corporation (NYSE:NOC) completed the acquisition of M5 Network Security Pty Ltd. Australia-based M5 Network Security is a provider of cybersecurity and secure mobile communications products and services, and advanced analytics to Australian military and intelligence organizations.
These acquisitions help the defense pros in fulfilling task orders and contracts. For instance, in December 2012, Raytheon received a contract to develop new techniques to perform research and develop tools to integrate new and individual facts into existing large information stores. In this case, the company would be helped by the acquisition of SafeNet Inc. The acquired unit would help the company in performing this task order while maintaining its relationship with various customers.
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