Deloitte today announced a new financial analysis on the performance of the U.S. top 20 Aerospace & Defense (A&D) companies for 2008. The report identifies specific factors that significantly contributed to the industry falling short of yet another record-setting year.
"Since 2003, the U.S. A&D industry has performed very well, with earnings growth, improvements in asset utilization and capital structure, resulting in a lean and efficient industry that is well-positioned for the current downturn," said Tom Captain, vice chairman, Deloitte LLP, and the Global and U.S. Aerospace & Defense leader. "Our analysis indicates that 2008 would have been a record-setting year for the financial performance of these companies had it not been for industry strikes and the global economic turmoil."
According to Deloitte, the industry would have grown sales revenues by 7.2 percent and operating margin would have been 11.5 percent, absent the work stoppages and the global credit crisis. Otherwise, the U.S. top 20 A&D companies had a 5.2 percent growth in sales revenues and a decrease of 9.2 percent in operating earnings. Also, additions to backlog continued at a brisk pace, albeit at a slower pace, with a book to bill ratio of 1.27x in 2008, demonstrating resilience going into the downturn.
Deloitte's report identifies four components necessary for these companies to be successful in 2009 and beyond:
1. Successful continuance of current large-scale programs under contract
2. Effective management of cost and schedule targets while achieving mission assurance for the customer
3. Executing strategic leverage in the acquisition space
4. Identifying and capturing technology direction and funding of the new administration's defense and security priorities
To access the Deloitte study in full, please visit: www.deloitte.com/us/a&D/2008wrapup. For more information about Deloitte's Aerospace & Defense group, please visit www.deloitte.com/us/a&d
As used in this document, "Deloitte" means Deloitte LLP and Deloitte Services LP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.