19 Jul 108. The prospect of a bidding war for Detica, regarded as one of most attractive British software companies, has emerged after BAE Systems made an informal offer. After the market closed, Detica said it had received an initial approach from an unnamed party. The shares rose 22p to 303p yesterday, giving Detica a market capitalisation of £351m, as speculation grew about the possible approach. The shares have been hit recently because of the company’s exposure to the financial services market. Detica would be attractive to BAE, Europe’s biggest defence manufacturer, because it is regarded as one of the leading independent IT services providers in UK government security. BAE declined to comment and Detica would not reveal the identity of the suitor. With military spending being squeezed, the biggest defence companies are targeting adjacent areas for growth, with homeland security increasingly important. Detica’s attractiveness grew earlier this year after it was included in the Trusted Borders consortium, led by Raytheon Systems, the US defence group, which won the contract for the next phase of the UK government’s e-borders programme. Detica will build the intelligence and analytics systems for the programme, which will provide British security forces with pre-screening tools to check people entering the UK. (Source: FT.com)
18 Jul 08. Honeywell (NYSE: HON) announced second quarter 2008 sales increased 13% to $9.7bn from $8.5bn last year. Earnings were up 23% to $0.96 per share, versus $0.78 per share last year. Cash flow from operations was $1,042m versus $983m in the second quarter of 2007 and free cash flow (cash flow from operations less capital expenditures) was $853 million, compared to $820m last year. Year to date the company has generated cash flow from operations of $1,763m versus $1,561m in the same period last year and free cash flow (cash flow from operations less capital expenditures) of $1,424m, compared to $1,278m in 2007.
“Honeywell delivered a strong second quarter,” said Honeywell Chairman and CEO Dave Cote. “These results reflect our diverse and global business portfolio and the strength of Honeywell’s operating disciplines. Aerospace continued to win significant new contracts, Automation and Control Solutions made acquisitions in key adjacent markets, Transportation Systems added new platform wins to its turbo technologies leadership position, and Specialty Materials had sales growth in all businesses and regions.”
“We expect double digit earnings growth in the second half,” continued Cote. “Our businesses are well positioned with long-term macro trends, such as safety, security, energy efficiency, and energy generation. We believe that our great positions in good industries and continued flawless execution on productivity initiatives – Honeywell Operating System, Velocity Product Development, and Functional Transformation – will help us deliver consistent and profitable growth even in this tough global economic environment.”
Honeywell is increasing its previously stated 2008 sales guidance to $37.6 – 38.2bn and full-year earnings per share to $3.75 – 3.85. EPS guidance does not include the expected gain on the sale of the Consumables Solutions (CS) business. The company expects a gain on the sale of CS in the third quarter, which may be significantly offset by repositioning or other actions.
Second Quarter Segment Highlights
•Sales were up 8%, compared with the second quarter of 2007, driven by 7% growth in Commercial and 11% growth in Defense and Space. Commercial sales reflected growth of 6% in original equipment and 7% growth in aftermarket spares and services. Defense and Space sales included the positive impact of the Dimensions International acquisition and higher sales of certain surface systems.
•Segment profit grew 15%, while segment margin increased by 100 bps to 18.3%, due primarily to increased prices, productivity, and volume growth, partially offset by inflat