13 Dec 13. Lockheed Martin Corp may revise upward its financial outlook for 2014 if Congress passes a two-year budget deal that would blunt the effect of mandatory budget cuts, Marillyn Hewson, the company’s president and chief executive officer, told Reuters on Monday. Hewson said she hoped the U.S. Senate would approve the agreement, which was passed by the House of Representatives last week, and was optimistic that further cuts required under sequestration could be eliminated as the U.S. economy improved.
“We had factored sequestration in, so now that we have more input … assuming that the budget gets approved, we’ll have an opportunity to revisit what our outlook is,” said Hewson, who will also assume the job of chairman of the company’s board on January 1, a year after she became CEO.
Lockheed, the Pentagon’s No. 1 supplier, has said that the budget cuts will knock about $400m to $450m from full-year revenues in 2013, and is currently forecasting a further slight decline in sales in 2014. Hewson said any revision in the company’s guidance would come during the company’s next earnings call in January. The Senate is due to vote in coming days on the budget deal that passed the House 332-94 on Thursday. The measure would roughly halve $52bn in automatic spending cuts facing the Pentagon in fiscal 2014, while providing additional relief from mandatory reductions in projected spending in 2015. “I’m very encouraged by the budget deal,” said Hewson. “It gives a lot more stability to us as an industry. It’s certainly not everything that everybody wanted, but a very important compromise that moved things forward.” (Source: Reuters)
11 Dec 13. Exelis (NYSE: XLS) announced that its board of directors has unanimously approved a plan to spin-off its military and government services business, currently called Exelis Mission Systems, into an independent public company. This business is currently part of the company’s Information and Technical Services segment. The transaction is intended to be tax-free to Exelis and its shareholders, is expected to be completed by the summer of 2014, and is subject to final approval of the company’s board of directors. Following completion of the spin-off, Exelis will retain a portfolio of mission critical, affordable and platform agnostic products and services for managing global threats, conflicts and complexities. The business will focus future investments on strengthening its four strategic growth platforms of Critical Networks; ISR & Analytics; Electronic Warfare; and Aerostructures. These growth platforms, which have been strategically aligned with future customer
requirements, are supported by the company’s most differentiated and enduring C4ISR capabilities such as global intelligence, surveillance and reconnaissance systems, networked communications, integrated electronic warfare, and engineering and professional services. Following the spin-off, the company expects that revenues will reflect greater customer diversity. Today, about 30 percent of Exelis revenues are from non-U.S. defense markets such as air traffic management, information and cyber security, commercial and international markets. Following the spin-off, it is expected that non-U.S. defense markets will account for approximately 50 percent of Exelis revenues. Pro-forma for the spin-off, Exelis is expected to generate 2013 estimated revenues of approximately $3.4bn with meaningful appreciation in its growth and operating margin profile. Exelis expects to continue its current quarterly dividend and maintain a capital structure consistent with investment-grade credit ratings. (Source: Yahoo!/BUSINESS WIRE)
13 Dec 13. Profits up for rifle-maker Freedom Group on Sandy Hook anniversary. Freedom Group, manufacturer of the rifle used in the Sandy Hook school shootings a year ago, expects earnings to have risen about 52 per cent this year. The group, now formally known as Remington Outdoor Company, said in a release posted on