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26 Jul 24. HENSOLDT with strong order intake and increased profitability in the first half of 2024.

Order intake reaches EUR 1,359m in the first half of the year
New record order backlog of EUR 6,553m
Revenue up 17.0% to EUR 849m in the first half of 2024
Adjusted EBITDA rises by 26.2% to EUR 103m
Adjusted EBITDA margin increases to 12.2% (previous year: 11.3%)
Guidance for the 2024 financial year confirmed

The HENSOLDT Group (“HENSOLDT”) further underpinned its position as a leading European company in the defence electronics industry with global reach in the first half of 2024. The positive business environment and continued high defence spending led to another strong order intake, which rose to a total of EUR 1,359 m in the first six months of the current financial year and exceeded the already high order intake in the same period of the previous year (EUR 1,071m).

Revenue increased by 17.0% (EUR 849m; previous year: EUR 726m) compared to the same period of the previous year. In addition, there was lower pass-through business (revenue with a low value-added share) compared to the previous year. The TRML-4D radars in particular contributed to this dynamic growth in the core business. The strong increase in adjusted EBITDA of 26.2% (EUR 103m; previous year: EUR 82m) was mainly due to an increase in revenue volume, primarily driven by the core business, and the corresponding economies of scale as well as the first-time consolidation of the ESG Group. The ESG Group contributed EUR 82m to this growth. Adjusted for the business activities of the ESG Group, the core business grew by 10% compared to the same period of the previous year.

The adjusted EBITDA margin improved by 12.2% (previous year: 11.3%).

Oliver Dörre, CEO of the HENSOLDT Group, says: “The successful development of our business shows that, even in this tense geopolitical security climate, we, as a platform-independent provider can support our customers with market-leading solutions for the security needs of the future. The positive results from the first half of 2024 confirm that our strategy is effective and that we have set the right course, especially in operational terms. The integration of ESG Group has been successful and we continue to drive profitable growth. This ensures we remain a reliable partner for our customers.”

Christian Ladurner, CFO of the HENSOLDT Group, says: “The sustained momentum of our order intake reflects the growing awareness of the importance of air defence. For the second consecutive year, we have recorded a strong order intake of well over one bn euros at the half-year mark. Our current order backlog amounts to around EUR 6.6 bn – about one bn more than the same period last year. With this robust foundation, we are once again underscoring our commitment and ability to make an important contribution with our solutions to national and international defence.”

Continued strong growth in order intake

With a volume of EUR 1,359m, order intake in the first half of the current financial year exceeded the already high level of EUR 1,071 m in the same period of the previous year by 26.9%. The order intake was characterised in particular by the close-range and short-range air defence system (LVS NNbS) commissioned for the German Bundeswehr. In addition, orders were received for further TRML-4D radars to support Ukraine as well as orders received as part of the European Sky Shield Initiative ESSI for Latvia and Slovenia. From the second quarter of 2024, order intakes from the ESG Group, which was included for the first time, totalling EUR 166m are included in the Sensors segment for three months. At EUR 139m, incoming orders in the Optronics segment in the first half of 2024 were significantly lower than the strong order intake in the same period of the previous year. In particular, the first half of 2024 included orders for the laser rangefinder for the M1 Abrams main battle tank, an order as part of the LVS NNbS project in the Ground Based Systems product line and orders in the Industrial Commercial Solutions product line in connection with Final Focus Metrology (FFM). The previous year was characterised by incoming orders, including for the Leopard 2 platform in the Ground Based Systems product line.

Positive increase in revenue, earnings and free cash flow

The HENSOLDT Group’s revenue increased by 17.0% to EUR 849m (previous year: EUR 726m). The TRML-4D air defence radars in particular contributed to dynamic growth in the core business in the first half of 2024. The two major projects PEGASUS (airborne system for electronic signals intelligence) and the Eurofighter radars developed as expected, revenue with a low value-added share were significantly below the previous year’s figure. Adjusted EBITDA increased to EUR 103 m (previous year: EUR 82 m). The adjusted EBITDA margin was 12.2% (previous year: 11.3%). The adjusted free cash flow also improved compared to the previous year and amounted to EUR -145m (previous year: EUR -157m).

Outlook for the 2024 financial year confirmed

For the 2024 financial year, HENSOLDT expects business to continue to develop positively, driven primarily by the continuing high demand from the special funds of the German government and NATO countries and the continuing high international demand for defence solutions. Specifically, HENSOLDT expects consolidated revenues of approx. EUR 2.3bn for the 2024 financial year and a moderate increase in adjusted EBITDA with an adjusted EBITDA margin before pass-through business is expected to be between 18% and 19%.

26 Jul 24. Leonardo, Airbus in talks to strengthen collaborations, paper says. Leonardo and France’s Airbus (AIR.PA), opens new tab are discussing ways to strengthen collaborations and industrial synergies, the chief executive of the Italian defence group said on Friday.

“There are many potential synergies between Airbus and Leonardo in different sectors,” Chief Executive Roberto Cingolani told financial daily Il Sole 24 Ore in an interview. “Our technical teams are working to see how to strengthen collaborations and industrial synergies.”

In mid-July Cingolani had said the state-controlled group was working with Airbus and Thales <TCFP.PA> on a joint strategy for the space sector. (Source: Reuters)

25 Jul 24. RTX lifts 2024 profit forecast on strength in aviation sector. U.S. aerospace and defense company RTX, raised its full-year earnings forecast and beat estimates for second-quarter profit on Thursday, aided by a rebound in the broader commercial aviation sector.

RTX stock hit an all time high, trading up 8% at $113 in New York.

Airlines are flying older aircraft to meet the surge in air travel demand amid a shortage of new jets, leading to a bustling aftermarket business and benefiting companies such as RTX.

“The strength in our end-markets and first-half performance gives us the confidence to increase our outlook for adjusted sales and adjusted EPS for the full year,” said CEO Chris Calio.

Meanwhile, strong demand for original equipment and aftermarket services led to a more than twofold jump in quarterly profit at Pratt and Whitney, a subsidiary of RTX, to $542m.

GTF COMPENSATION

Pratt and Whitney — the maker of the popular Geared Turbofan (GTF) engines, which powers Airbus’ A320neo jets — has been conducting an inspection drive to check for potentially flawed components in the GTF jet engines.

RTX said it has reached agreements with more than 18 GTF engine customers.

“We had 9 (agreements) that were completed at the end of the first quarter, we’ve more than doubled that,” Chief Financial Officer Neil Mitchill told Reuters in an interview.

According to a Bernstein note published this month, around 540 GTF-powered Airbus A320neo aircraft are currently grounded due to engine issues.

RTX posted adjusted per-share net income of $1.41 in the quarter, beating analysts’ average estimate of $1.30, according to LSEG data.

The company’s revenue jumped 8% to $19.72 bn during the period.

It expects full-year adjusted profit per share to be between $5.35 and $5.45, compared with its prior forecast range of $5.25 to $5.40.

GE Aerospace, which makes the competing LEAP engines, also raised its full-year profit forecast earlier this week, but flagged persistent supply constraints hurting new engine output. (Source: Reuters)

25 Jul 24. RTX Reports Q2 2024 Results.

RTX delivers solid operational performance and 8% sales growth; Increases 2024 outlook for adjusted sales* and adjusted EPS*, revises free cash flow. RTX (NYSE: RTX) reported second quarter 2024 results.

Second quarter 2024

Reported sales of $19.7bn, up 8 percent versus prior year and up 10 percent on an organic* basis
Adjusted sales* of $19.8bn, up 8 percent versus prior year
GAAP EPS was $0.08 and included $0.29 of acquisition accounting adjustments and $1.04 of other net significant and/or non-recurring items and restructuring, including $0.03 of restructuring and other non-recurring items, a $0.68 charge related to the expected resolution of several legacy legal matters, and a $0.33 charge related to a fixed priced development contract with a foreign customer at Raytheon
Adjusted EPS* of $1.41, up 9 percent versus prior year
Operating cash flow of $2.7bn; Free cash flow* of $2.2bn
Company backlog of $206bn; including $129 bn of commercial and $77bn of defense
Realized $120m of incremental RTX gross cost synergies

Updates outlook for full year 2024

Adjusted sales* of $78.75 – $79.5bn, up from $78.0 – $79.0bn
Adjusted EPS* of $5.35 – $5.45, up from $5.25 – $5.40
Free cash flow* of approximately $4.7bn, down from approximately $5.7bn

“RTX delivered strong operational performance in the second quarter, with 10 percent organic sales* growth, adjusted margin* expansion across all three segments and $2.2bn in free cash flow*,” said RTX President and CEO Chris Calio. “The strength in our end markets and first half performance give us the confidence to increase our outlook for adjusted sales* and adjusted EPS* for the full year.”

“With a $206bn backlog and unprecedented demand across our portfolio, we are focused on executing on our customer commitments powered by our CORE operating system, investing in innovative technologies and capabilities, and leveraging the breadth and scale of RTX to drive long-term shareowner value.”

Second quarter 2024

RTX reported second quarter sales of $19.7bn, up 8 percent over the prior year. Adjusted sales* were $19.8bn, also up 8 percent over the prior year. GAAP EPS of $0.08 was down 91 percent versus the prior year, and included $0.29 of acquisition accounting adjustments, $0.03 of restructuring and other net significant and/or non-recurring charges, a $0.68 charge related to the expected resolution of several legacy legal matters and a $0.33 charge related to a fixed price development contract with a foreign customer at Raytheon. Adjusted EPS* of $1.41 was up 9 percent versus the prior year.

The company reported net income attributable to common shareowners in the second quarter of $111m which included $393m of acquisition accounting adjustments, $35m of restructuring and other net significant and/or non-recurring charges, a charge of $918m related to the expected resolution of several legacy legal matters and a $43 m charge related to a fixed price development contract with a foreign customer at Raytheon. Adjusted net income* of $1.9bn was flat versus prior year as growth in adjusted segment operating profit* was offset by higher interest and tax expenses, and lower pension income. Operating cash flow in the second quarter was $2.7bn. Capital expenditures were $537m, resulting in a free cash flow* of $2.2bn.

Legacy Legal Matters

The Company has made progress in the quarter on resolving several outstanding legal matters which has resulted in an EPS charge of $0.68 associated with the expected resolution of these matters. The Company expects to enter into a deferred prosecution agreement with the Department of Justice (DOJ) and to be subject to an administrative order with the Securities and Exchange Commission (SEC) to resolve the previously disclosed criminal and civil government investigations into improper payments made by Raytheon Company and its joint venture, Thales-Raytheon Systems (TRS), in connection with certain Middle East contracts since 2012. The Company also expects to enter into a deferred prosecution agreement and an False Claims Act (FCA) settlement with the DOJ to resolve previously disclosed criminal and civil government investigations into defective pricing claims for certain legacy Raytheon Company contracts entered into between 2011 and 2013 and in 2017. The charge also includes the impact of certain voluntarily disclosed export controls violations primarily identified in connection with the integration of Rockwell Collins and, to a lesser extent, Raytheon Company into RTX, including certain violations expected to be resolved pursuant to a consent agreement with the Department of State (DOS). In total, RTX recorded an aggregate charge of $918m in the quarter, bringing the total associated reserve for these matters to $1.24bn. Based upon the current status of discussions, we believe that the finalization of our respective agreements with the DOJ, SEC and DOS will occur during the second half of 2024 and therefore, expect approximately $1.0bn of related payments to be made within the same timeframe with the balance to be paid over the next several years. The items above have been incorporated in our updated 2024 free cash flow* outlook.

Collins Aerospace had second quarter 2024 reported sales of $6,999m, up 10 percent versus the prior year. The increase in sales was driven by a 12 percent increase in commercial aftermarket, a 10 percent increase in commercial OE, and a 7 percent increase in defense. The increase in commercial sales was driven primarily by an increase in commercial air traffic, including in higher flight hours, and increased volume across all OEM sales channels. The increase in defense sales was driven primarily by higher volume.

Collins Aerospace reported operating profit of $1,118m, up 24 percent versus the prior year. The increase in operating profit was primarily driven by drop through on higher commercial aftermarket volume, as well as higher defense and commercial OE volume. On an adjusted basis, operating profit* of $1,145m was up 25 percent versus the prior year.

Pratt & Whitney

Pratt & Whitney had second quarter 2024 reported sales of $6,802m, up 19 percent versus the prior year. The increase in sales was driven by a 33 percent increase in commercial OE, a 16 percent increase in military, and a 15 percent increase in commercial aftermarket. The increase in commercial sales was primarily due to higher volume and favorable mix within aftermarket as well as higher GTF OE volume and favorable mix. The increase in military sales was driven by higher sustainment volume across multiple platforms.

Pratt & Whitney reported operating profit of $542m, up 136 percent versus the prior year. Drop through on higher commercial aftermarket volume as well as favorable Large Commercial OE and commercial aftermarket mix, was partially offset by higher Large Commercial OE deliveries and the absence of a $60 m favorable prior year contract matter. Higher military volume and favorable mix was more than offset by higher production costs and higher R&D and SG&A expenses. The prior year reported operating profit included the impact of a charge related to a customer insolvency of $181m. On an adjusted basis, operating profit* of $537m was up 23 percent versus the prior year.

Raytheon

Raytheon had second quarter 2024 reported sales of $6,511m, down 3 percent versus prior year as higher volume on land and air defense systems including Global Patriot, counter-UAS programs and Stinger was more than offset by the divestiture of the Cybersecurity, Intelligence and Services business completed in the first quarter of 2024. Adjusted sales* of $6,581 m were down 2 percent versus prior year. Excluding the impact of acquisition and divestitures, sales were up 4 percent versus prior year*.

Raytheon reported operating profit of $127m, down 80 percent versus the prior year. Drop through on higher volume, favorable mix, and improved net productivity was more than offset by a $575m charge related to the anticipated termination of a fixed price development contract with a foreign customer which was contracted in 2016 under legacy Raytheon Company. On an adjusted basis, operating profit* of $709m was up 7 percent versus the prior year.

*Adjusted net sales, organic sales, adjusted operating profit (loss) and margin, adjusted segment operating profit (loss) and margin, adjusted net income, adjusted earnings per share (“EPS”), adjusted effective tax rate and free cash flow are non-GAAP financial measures. When we provide our expectation for adjusted net sales, adjusted EPS and free cash flow on a forward-looking basis, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures (expected diluted EPS and expected cash flow from operations) is not available without unreasonable effort due to potentially high variability, complexity, and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results. See “Use and Definitions of Non-GAAP Financial Measures” below for information regarding non-GAAP financial measures.

26 Jul 24. Babcock International Group PLC.

Full year results for the year ended 31 March 2024

David Lockwood, Chief Executive Officer, said: “We have made good strategic progress, delivering another year of strong growth with cash flow ahead of expectations. Babcock is well positioned to benefit from the sustained uplift in global defence budgets, driven by the need to recapitalise, re-equip and modernise militaries, resulting in an increase in our opportunity set. We combine strong engineering know-how, high customer intimacy and extensive operational asset knowledge together with highly collaborative relationships and product development capability. This differentiated proposition is increasingly attractive to our customers. We look to the future with confidence as we continue to progress towards our medium-term targets.”

Financial highlights

– Contract backlog £10.3bn, up 9%, driven by Nuclear and Marine

– Revenue of £4,390.1m grew 11% on an organic basis, driven by strong growth in Nuclear and Land

– Statutory operating profit increased to £241.6m driven by improved performance across the Group, a one-off £17m profit on property disposal and non-repeat of a £118m loss on disposals in FY23. Within operating profit is the £90m loss on the Type 31 contract as set out in our trading update on 17 July 2024

-Underlying operating profit increased 34% to £237.8m, which includes the loss on Type 31 and profit on property disposal. Strong performance in Nuclear, Land and Aviation

– Underlying operating margin improved 140 basis points to 5.4%, which includes (2.0)% from the Type 31 loss and 0.4% from the profit on property disposal

– Underlying free cash flow of £160m was significantly better than expected, with operational performance and early customer receipts affording an accelerated £35 m pension deficit repair contribution. Underlying operating cash conversion was 136% (FY23: 173%); excluding Type 31 this was 98% (FY23: 110%)

– Net debt to EBITDA reduced to 0.8x on a covenant basis. Net debt reduced by £129.0m to £435.4m

– Dividend reinstated: recommended final dividend of 3.3 pence per share, taking the total dividend for FY24 to 5.0 pence per share (FY23: nil)

Outlook

– Our expectations for FY25 remain unchanged

– With c.70% of FY25 expected revenue under contract at 1 April 2024, we enter the year strongly positioned with good momentum and are confident of making further progress against our medium-term guidance: to deliver mid-single digit average annual revenue growth and achieve underlying operating margins of at least 8% and underlying operating cash conversion of at least 80%

Strategic highlights

– Cooperation agreement with Saab to develop an advanced naval corvette for Sweden with initial design contract award

– Strategic agreement with HII to collaborate on nuclear-powered submarine capabilities to support the AUKUS endeavour

– Babcock General Logistics Vehicle (GLV) launched to target emerging UK and international opportunities

– Type 31 programme restructured following detailed operational review

– Babcock Skills Academy launched in Devonport to develop submarine support capabilities in our growing workforce

– Gained validation of our net-zero targets from the Science based Targets initiative (SBTi)

– Long-term funding agreements reached with two of our three large pension schemes

Operational highlights

Marine

– Type 31: HMS Venturer (ship 1) superstructure almost complete, HMS Active (ship 2) keel laid and HMS Formidable (ship 3) steel cut due in FY25. Programme restructured following a detailed operational review

– Three Arrowhead 140 licences delivered for the MIECZNIK Class frigate for the Polish Navy

– Awarded contract by Saab to support design of the Swedish Navy’s Luleå Class Next Generation Surface Combatant

– Achieved Operation Service Commencement of the Skynet Service Delivery Wrap space communications contract

– Contract awarded by Government of Ukraine to support two Mine Countermeasure Vessels (MCMVs) purchased from the UK

Nuclear

– Commenced deep maintenance on the second of the UK’s Vanguard Class nuclear submarines, HMS Victorious, under a c.£560m full cost recovery contract

– Awarded contracts to develop the support solution for the UK’s Dreadnought and SSN-AUKUS submarine programmes

– X-energy and Cavendish Nuclear selected for UK Government’s Future Nuclear Enabling Fund (FNEF)

– Nuclear submarine Major Infrastructure Programme (MIP) revenue increased to £459m (FY23: £267m).

– Awarded c.£750m infrastructure contract in preparation for Astute Class deep maintenance programme (DMP)

Land

– DSG contract extension under negotiation following notification by UK MOD of its intention to exercise up to five option years

– Awarded second Land contract to deliver ground and equipment support to the French Navy, Army and Air Force

– Signed a collaboration agreement with Singapore Technology Engineering for manufacture of UK mortar systems

– Contract expansion to support UK-gifted platforms to Ukraine

– Won the seven-year ARMCEN support contract for armoured vehicle technical training for the British Army

Aviation

– Completed delivery of the six H160 helicopters to the French Navy as part of a 10-year contract with the French MOD

– Delivered the first Elementary Flying Training (EFT) phase of the Ukrainian Pilot Force programme to fly F-16 jets

– Delivered unprecedented volume of firefighting operations in Canada with >1,500 flight hours and >99% aircraft availability

– Exploring opportunities with Zero Petroleum for synthetic fuel to minimise the environmental impact of military aircraft

– In May 2024, awarded 12-year contract with Airbus to support 48 French Civil Security and police EC145 helicopters

Alternative Performance Measures (APMs):

The Group provides APMs, including underlying operating profit, underlying margin, underlying earnings per share, underlying operating cash flow, underlying free cash flow, net debt, net debt excluding leases and contract backlog to enable users to have a more consistent view of the performance and earnings trends of the Group. These measures are considered to provide a consistent measure of business performance from year to year. They are used by management to assess operating performance and as a basis for forecasting and decision-making, as well as the planning and allocation of capital resources. They are also understood to be used by investors in analysing business performance.

The Group’s APMs are not defined by IFRS and are therefore considered to be non-GAAP measures. The measures may not be comparable to similar measures used by other companies, and they are not intended to be a substitute for, or superior to, measures defined under IFRS. The Group’s APMs are consistent with the year ended 31 March 2023.

Revenue:

– FY24 included a revenue reversal of £66.3m from the Type 31 loss. Excluding this, FY24 revenue was £4,456.4m

– FY23 included £421.6m from disposals, a revenue reversal of £42.6m from the Type 31 loss and a £11.6m one-off credit (revenue and profit). Excluding these, FY23 revenue was £4,048.0m

Underlying operating profit:

– FY24 underlying operating profit included a £90.0m Type 31 loss and a profit on property disposal of £17.0m. Excluding these, FY24 underlying operating profit was £310.8m

– FY23 underlying operating profit included the £100.1m Type 31 loss, a one-off accounting credit (£11.6 m as above), and £1.1m operating profit contribution from businesses divested in the year. Excluding these, FY23 underlying operating profit was £265.3m

Underlying operating margin:

– Excluding the Type 31 loss and profit on property disposal, FY24 underlying operating margin was 7.0%

– Excluding disposals, the Type 31 loss and the one-off credit, FY23 underlying operating margin was 6.6%

25 Jul 24. L3Harris raises 2024 outlook amid global tensions. L3Harris, raised its outlook for 2024 after beating Wall Street estimates for second-quarter profit on Thursday, betting on sustained weapons demand and robust defense spending amid escalating global security concerns.

The defense firm raised its 2024 adjusted profit forecast to be between $12.85 and $13.15 per share, up from its previous range of $12.70 to $13.05. Analysts were expecting $12.97 per share, according to LSEG.

The ongoing war in Ukraine has driven strong global demand for U.S. weaponry, with nations actively negotiating and securing deals to acquire arms and expedite existing contracts.

The U.S. Congress’s approval in April of an additional $95bn in funding—including aid for replenishing U.S. stockpiles in Ukraine and Israel— has further benefited defense companies like L3Harris.

The defense contractor, formed by the merger of L3 Technologies and Harris Corp in 2019, counts the Pentagon, planemaker Boeing and defense and aerospace giant RTX, among its customers.

Florida-based L3Harris posted an adjusted net income of $3.24 per share, exceeding Wall Street estimates of $3.18 per share.

L3Harris, along with Northrop is one of the top two suppliers of sought-after rocket motors used in guided multiple-launch rocket systems, which have played a crucial role in Ukraine.

The company now expects revenue to be between $21.0bn and $21.3bn, up from its previous estimate of $20.8bn to $21.3bn. Overall sales rose 13% to $5.3bn. (Source: Reuters)

25 Jul 24. L3Harris Technologies Reports Strong Second Quarter 2024 Results, Increases 2024 Guidance

Orders1 of $5.2bn; book-to-bill of 1.0x
Revenue of $5.3bn, up 13%
Operating margin of 9.0%; adjusted segment operating margin1 of 15.6%
Diluted earnings per share (EPS) of $1.92; non-GAAP EPS1 of $3.24
2024 revenue guidance range increases from $20.8B – $21.3bn to $21.0bn – $21.3bn
2024 adjusted segment operating margin1 guidance increases from >15% to 15.2% – 15.4%*
2024 Non-GAAP EPS guidance range increases from $12.70 – $13.05 to $12.85 – $13.15*

L3Harris Technologies (NYSE: LHX) reported second quarter 2024 diluted EPS of $1.92, on second quarter revenue of $5.3bn. Second quarter 2024 non-GAAP diluted EPS1 was $3.24, as compared to non-GAAP diluted EPS1 of $2.97 for the second quarter of 2023, a 9% increase.

“We delivered another strong quarter of financial results with improved margins, reflecting our commitment to operational excellence and a relentless focus on execution that delivers value to our customers and shareholders,” said Christopher E. Kubasik, Chair and CEO.

Kubasik added, “As we celebrate the five year anniversary of the L3 and Harris merger, I’m proud of the progress we’ve made as the industry’s Trusted Disruptor. Our first half results reflect progress toward achieving our 2026 financial framework. We are raising our revenue, margin and EPS guidance for the year, underscoring the tangible results of our LHX NeXt initiative, which is focused on streamlining our operations and enhancing our efficiency while transforming the company.”

* A reconciliation is not available. See the note on page 2 and Non-GAAP Financial Measures on page 6 for more information.

*When we provide our expectation for adjusted segment operating margin, effective tax rate on non-GAAP income, non-GAAP EPS and adjusted free cash flow on a forward-looking basis, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort due to the unavailability of items for exclusion from the GAAP measure. We are unable to address the probable significance of this information, the variability of which may have a significant impact on future GAAP results. See Non-GAAP Financial Measures on page 7 for more information.

Revenue: Second quarter revenue increased 13%, primarily driven by the acquisition of Aerojet Rocketdyne (AR) and 1% total organic growth from increased demand for tactical and broadband communication products in our Communication Systems (CS) segment. Growth was also driven by continued demand in Space Systems and classified Intel & Cyber programs within the Space & Airborne Systems (SAS) Segment. This growth was offset by lower volumes in our Airborne Combat Systems business. In the Integrated Mission Systems (IMS) segment, growth in Maritime programs was offset by lower volumes associated with our Commercial Aviation business, the divestiture of which is pending closure.

* A reconciliation is not available. See the note on page 2 and Non-GAAP Financial Measures on page 6 for more information.

Operating Margin:

GAAP: Second quarter operating margin increased 50 bps to 9.0% driven by improved operational performance, partially offset by the impact of increased corporate unallocated items, including intangible amortization from mergers and acquisitions and LHX NeXt implementation costs.

Adjusted segment operating margin1: Expanded 80 bps to 15.6% due to improved operational and program performance across the SAS, IMS and CS segments, including LHX NeXt driven cost savings.

EPS:

GAAP: Second quarter EPS increased 5% to $1.92 due to an increase in operating income, partially offset by the impact of intangible amortization from mergers and acquisitions, LHX NeXt implementation costs and higher interest expense.

Non-GAAP1: Increased 9% to $3.24 driven by higher adjusted segment operating income1, partially offset by higher interest expense.

The largest differences between GAAP and Non-GAAP EPS are attributable to intangible amortization and LHX NeXt implementation costs.

Cash Flows:

Cash from Operations: Second quarter cash from operations was $754 m driven by net income growth and improved working capital performance.

Adjusted free cash flow1: Delivered $714 m in adjusted free cash flow1 driven by net income growth, improved working capital performance and adjustments for acquisitions and severance related costs.

SEGMENT RESULTS AND GUIDANCE:

SAS

Revenue: Second quarter revenue was flat year-over-year, resulting from continued growth in Space Systems and classified program growth in Intel and Cyber, which was offset by lower volumes in our Airborne Combat Systems business and lower revenues from the divestiture of the antenna business. Excluding this divestiture, organic revenue increased 1%.

Operating Margin: Second quarter operating margin increased 280 bps largely due to the absence of a non-cash charge that impacted 2023, improved operational and program performance, including the impact of the LHX NeXt cost savings initiative.

* A reconciliation is not available. See the note on page 2 and Non-GAAP Financial Measures on page 6 for more information.

IMS

Revenue: Second quarter revenue was flat, as higher volumes on Maritime programs were offset by lower volume in our Commercial Aviation business.

Operating Margin: Second quarter operating margin increased 260 bps from improved program performance, including the impact of LHX NeXt cost savings.

Revenue: Second quarter revenue increased 4%, primarily from higher volumes in Broadband Communications and increased Department of Defense (DoD) sales in Tactical Communications.

Operating Margin: Second quarter operating margin decreased 80 bps primarily from higher domestic tactical radio mix and timing of software sales, partially offset by LHX NeXt cost savings and the favorable impact of legal settlements.

Revenue and Operating Margin: Second quarter results are attributed to program execution across Missile Solutions and Space Propulsion and Power Systems. (Source: BUSINESS WIRE)

25 Jul 24. Northrop Grumman lifts 2024 earnings forecast on weapons demand. July 25 (Reuters) – U.S. defense company Northrop Grumman, raised its forecast for full-year revenue and profit on Thursday, amid increased global defense spending and a strong backlog.

Shares were up 5.1% to $464.77 during the New York trading session.

Chief Executive Officer Kathy Warden told investors on a post earnings conference call that the headwinds for the B-21 Raider program are behind them and they “expect program margin dollars to grow annually from here.”

The B-21 Raider program has incurred losses on initial production contracts.

The ongoing war in Ukraine has fueled a strong demand for U.S. weaponry in Europe, with nations actively engaged in negotiations and striking deals to acquire arms and looking to speed up ongoing contracts.

Northrop now expects annual sales to reach up to $41.4bn, up from its previous forecast of $40.8bn to $41.2bn. It sees adjusted profit per share between $24.90 and $25.30, up from an earlier $24.45 to $24.85 per share.

The U.S. Congress’ recent approval for $95bn additional funding, which includes aid for replenishing U.S. stockpiles in Ukraine and Israel has benefited Northrop.

Other major defense contractors, such as Lockheed Martin, RTX , and General Dynamics are also benefiting from the new funds.

Northrop is facing cost challenges on some of its fixed-price contracts due to inflation, strained supply chains, and labor shortages.

Additionally, the Northrop-managed Sentinel program, aimed at replacing the aging intercontinental ballistic missile system, has significantly exceeded its initial budget estimate.

“Northrop is well positioned for defense work related to nuclear capabilities. We think this is one key area poised for relatively strong spending in coming years with an aggressive Russia on the horizon, as well as newfound cooperation between Russia and China raising the geopolitical stakes.” CFRA Research’s Garrett Nelson said.

The company posted earnings per share of $6.36 for the second quarter ended June 30, up from $5.34 per share a year earlier. Sales rose 7% to $10.22bn.

Profits in Northrop’s Defense Systems segment jumped by 23%, on high demand for ammunition and rocket motors used in guided multiple-launch rocket systems, which are critical in the Ukraine conflict.

Northrop and L3Harris Technologies Inc., are the top companies that supply these sought-after rocket motors. (Source: Reuters)

25 Jul 24. Northrop Grumman Reports Second Quarter 2024 Financial Results.

Net awards of $15.1bn; book to bill of 1.5x
Sales increase 7 percent to $10.2bn
Operating income increases 13 percent driven by strong performance and cost efficiencies
Diluted earnings per share increase 19 percent to $6.36
Operating cash flow of $1.4bn; free cash flow1 increases 80 percent to $1.1bn
Company raises 2024 sales guidance to $41.0 – $41.4bn and MTM-adjusted EPS1 guidance to $24.90 – $25.30

Northrop Grumman Corporation (NYSE: NOC) reported second quarter 2024 sales increased 7 percent to $10.2bn, as compared with $9.6bn in the second quarter of 2023. Second quarter 2024 sales reflect continued strong demand for our products and services. Second quarter 2024 net earnings totaled $940m, or $6.36 per diluted share, as compared with $812m, or $5.34 per diluted share, in the second quarter of 2023.

“The Northrop Grumman team extended our strong performance into the second quarter with continued double-digit earnings growth, fueled in part by a 7 percent sales increase and expanding operating income. Our diverse portfolio includes capabilities in high demand and we have invested to create capacity and drive productivity to deliver differentiated capabilities for our customers,” said Kathy Warden, chair, chief executive officer and president. “We are laser focused on performance and continue to expand profitability through the deliberate actions we are taking. With strong support for our programs, growing global orders for our products, and solid execution in our business, we are increasing our revenue and EPS guidance for the year.”

Sales

Second quarter 2024 sales increased $642m, or 7 percent, due to higher sales at all four sectors, including 14 percent growth at Aeronautics Systems. Second quarter 2024 sales reflect continued strong demand for our products and services.

Operating Income and Margin Rate Second quarter 2024 operating income increased $123m, or 13 percent, primarily due to $49m of higher segment operating income and $47m of lower unallocated corporate expense. Operating margin rate increased to 10.7 percent from 10.1 percent primarily due to lower unallocated corporate expense and a benefit associated with the FAS/CAS operating adjustment.

Segment Operating Income and Margin Rate

Second quarter 2024 segment operating income increased $49m, or 5 percent, primarily due to higher sales.

Segment operating margin rate decreased to 10.8 percent and reflects lower operating margin rates at Mission Systems and Aeronautics Systems, partially offset by higher operating margin rates at Space Systems and Defense Systems. Federal and Foreign Income Taxes The company’s second quarter 2024 effective tax rate (ETR) increased to 18.0 percent from 17.7 percent in the prior year period principally due to higher interest expense on unrecognized tax benefits.

Net Earnings and Diluted EPS Second quarter 2024 net earnings increased $128m, or 16 percent, primarily due to $123m of higher operating income and a $34m increase in the non-operating FAS pension benefit, partially offset by a higher ETR.

Second quarter 2024 diluted earnings per share increased 19 percent, reflecting a 16 percent increase in net earnings and a 3 percent reduction in weighted-average diluted shares outstanding. Cash Flows Second quarter 2024 cash provided by operating activities increased $506m primarily due to improved trade working capital, largely driven by lower net federal tax payments, partially offset by lower advance payments. Second quarter 2024 free cash flow1 increased $490m, or 80 percent, principally due to higher net cash provided by operating activities. Awards and Backlog Second quarter 2024 net awards totaled $15.1bn and backlog totaled $83.1 bn. During the second quarter of 2024, the company reduced unfunded backlog by $0.7bn related to a termination for convenience on the Next Generation Interceptor (NGI) program at Space Systems.

Operating Results Effective July 1, 2024, the company realigned the Strategic Deterrent Systems (SDS) division, which includes the Sentinel program, from Space Systems to Defense Systems. The realignment is not reflected in the financial information contained in this release (except as it pertains to the company’s updated 2024 guidance). The realignment will be reflected in the company’s operating results beginning in the third quarter of 2024. Recast financial information for current and certain prior periods is presented in Schedule 6 of this release. AERONAUTICS SYSTEMS

Three Months Ended June 30

Second quarter 2024 sales increased $368m, or 14 percent. This increase was primarily due to higher restricted sales, a $128m increase on F-35 sustainment and production work largely driven by the timing of materials, and higher volume on the Triton program. Operating Income Second quarter 2024 operating income increased $17m, or 6 percent, due to higher sales, partially offset by a lower operating margin rate. Operating margin rate decreased to 10.0 percent from 10.7 percent principally due to sales growth on a low margin restricted program and lower net EAC adjustments. The second quarter 2023 operating margin rate reflected particularly strong performance due, in part, to restricted work.

DEFENSE SYSTEMS

Three Months Ended June 30

Sales

Second quarter 2024 sales increased $93m, or 7 percent, primarily due to ramp-up on certain military ammunition programs, higher volume from the timing of materials and increased order quantities on the Guided Multiple Launch Rocket System (GMLRS), ramp-up on the Stand-in Attack Weapon (SiAW) program and higher volume on the Integrated Battle Command System (IBCS) program. These increases were partially offset by lower volume due to the completion of an international training program. Operating Income Second quarter 2024 operating income increased $38m, or 23 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 13.5 percent from 11.7 percent principally due to higher net EAC adjustments driven by cost efficiencies and improved performance, as well as changes in contract mix.

MISSION SYSTEMS

Three Months Ended June 30

Sales

Second quarter 2024 sales increased $132m, or 5 percent, primarily due to higher volume on restricted advanced microelectronics programs, the timing of materials on marine systems programs, higher volume on the Surface Electronic Warfare Improvement Program (SEWIP) and ramp-up on full-rate production (FRP) awards on the Ground/Air Task Oriented Radar (G/ATOR) program. These increases were partially offset by lower sales on the F-35 program largely due to timing.

Operating Income Second quarter 2024 operating income decreased $40m, or 10 percent, due to a lower operating margin rate, partially offset by higher sales. Operating margin rate decreased to 13.0 percent primarily due to lower net EAC adjustments on certain airborne radar programs due, in part, to production inefficiencies that have driven higher labor costs, as well as changes in contract mix toward more cost-type content. SPACE SYSTEMS

Three Months Ended June 30

Sales

Second quarter 2024 sales increased $85m, or 2 percent, primarily due to a $117m increase on the Space Development Agency (SDA) Tranche 2 Transport Layer (T2TL) programs as they ramp, increased sales on the HALO program and higher materials volume on the GEM 63 program in support of Amazon’s Project Kuiper. These increases were partially offset by lower restricted sales due to a termination for convenience in our restricted space business during the first quarter of 2024.

Operating Income Second quarter 2024 operating income increased $41 m, or 14 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 9.1 percent from 8.1 percent principally due to changes in contract mix and an improvement in net EAC adjustments. The prior year period included a $15 m write-down of commercial inventory.

24 Jul 24. KBR, Inc. (NYSE: KBR) today announced its second quarter fiscal 2024 financial results.

“I am pleased to announce another fantastic quarter in which KBR continues to drive operational excellence and deliver outstanding results for customers. The focus, agility and commitment of our people have the business performing well across our key metrics. We expect this to continue for the rest of the year and thus are raising profit and cash flow guidance,” said Stuart Bradie, KBR President and CEO.

Bradie continued, “The announcement of the agreement to acquire LinQuest, an engineering, data analytics and digital integration company, builds on the strategy outlined in our investor day. We believe LinQuest will be an important accelerator to KBR’s strategy of furthering the delivery of high-end technology, expertise and mission capabilities. It is a leader in supporting the U.S. Space Force, U.S. Air Force and other U.S. Department of Defense and intelligence agencies, and together, KBR and LinQuest have highly complementary capabilities that we expect will drive revenue growth and synergy opportunities.”

New Business Awards

Backlog and options as of June 28, 2024 totaled $20.1bn. Delivered 1.0x trailing-twelve-months (TTM) book-to-bill1 as of June 28, 2024. Awarded $2.1bn of bookings and options in the quarter.

Sustainable Technology Solutions (STS) delivered 0.8x TTM book-to-bill1 as of June 28, 2024, including awards and achievements in the quarter as follows:

KBR’s green ammonia technology, K-GreeN®, selected by OCIOR Energy for its plant located in Odisha’s Gopalpur region, India. This will be the 10th KBR-licensed green ammonia plant globally and the first to be located in India.
Selected to design and deploy a proprietary operator training simulator for OCI Global’s 3,000 metric tonnes per day Texas Blue Clean Ammonia facility, which is expected to deliver a 70% reduction in total greenhouse gas emissions compared to conventional ammonia production.
Awarded a five-year contract, with options, to provide advisory and consultancy services to support the Iraqi government’s visionary infrastructure and future energy ambitions, including the delivery of megaprojects and sustainable development.
Awarded a contract by SABIC Fujian Petrochemicals to license KBR’s market-leading phenol technology in China. KBR’s phenol technology offers a sustainable and differentiated solution through reduced energy consumption and improved yields.

Government Solutions (GS) delivered 1.2x TTM book-to-bill1 as of June 28, 2024, including awards and achievements in the quarter as follows:

Selected as one of 11 awardees under the Medical Q Coded Support and Services Next Generation contract, which contains a ceiling of $43 bn, to bid on task orders to provide health and wellness support for military personnel and their families. This contract is a continuation of KBR’s five decades of vital health services support to individuals who perform in complex and multifaceted positions.
Awarded an $82m cost-plus-fixed-fee task order under an IAC MAC contract by the United States Air Force for the Air Force Life Cycle Management Center, which supports the B-52 System Program Office. This task order builds on KBR’s eight-year presence in the B-52 program office.
Selected as one of the awardees under the Global Contingency Services Multiple Award Contract III, which contains a ceiling of $2 bn, to bid on task orders to provide short-term facility support services for natural disasters, humanitarian efforts and military actions, and to cover incumbent contractors’ nonperformance or potential breaks in service at various locations throughout the world.
Awarded a $34m recompete cost-plus-fixed-fee single award IDIQ contract by the U.S. Naval Research Laboratory for facility operations, maintenance and security in Washington, D.C. over a five-year period.
Awarded a $52m, 60-month cost-plus-fixed-fee recompete Information Analysis Center Multiple Award Contract task order supporting the Counter Improvised Threat Systems Test and Evaluation for the Naval Air Warfare Center Weapons Division Quick Reaction Capability Office.

Financial Highlights for the Three Months Ended June 28, 2024

Revenue of $1.9bn, up 6% on a year-over-year-basis
Net income attributable to KBR of $106 m; Adjusted EBITDA2 of $216 m, up 13% on a year-over-year basis (11.6% Adjusted EBITDA2 margin)
Diluted EPS of $0.79; Adjusted EPS2 of $0.83, up 12% on a year-over-year basis
Operating cash flows of $170m
Bookings and options of $2.1bn during the quarter with 1.0x TTM book-to-bill1

Financial Highlights for the Six Months Ended June 28, 2024

Revenue of $3.7bn, up 6% on a year-over-year-basis
Net income attributable to KBR of $199 m; Adjusted EBITDA2 of $423m, up 13% on a year-over-year basis (11.5% Adjusted EBITDA2 margin)
Diluted EPS of $1.47; Adjusted EPS2 of $1.59, up 13% on a year-over-year basis
Operating cash flows of $261m
Bookings and options of $4.0bn during the year to date period with 1.0x TTM book-to-bill1

Commentary on the Three Months Ended June 28, 2024

Revenues were $1.9bn, up 6% compared to 2Q’23, primarily due to growth across Sustainable Technology Solutions; and within Government Solutions, new and on-contract growth across International, Defense & Intel, and Science and Space, partially offset by decline in Ukraine activity in Readiness & Sustainment.

Net income attributable to KBR was $106m, up $457m compared to 2Q’23, primarily due to an after tax cash charge of $132m in connection with the settlement of a legacy legal matter and a non-cash charge of $314m recorded in connection with the election of cash as the settlement method for our Convertible Notes and the repurchase of a portion of our Convertible Notes in the prior year that did not recur in the current year.

Adjusted EBITDA2 was $216m, up 13% compared to 2Q’23, with Adjusted EBITDA2 margins of 11.6%, up 75 bps year-over-year.

Diluted earnings per share was $0.79, up $3.39 compared to 2Q’23, primarily due to the increase in Net income attributable to KBR noted above. Adjusted earnings per share2 was $0.83, up $0.09 compared to 2Q’23, due to increases in gross profit and equity in earnings of unconsolidated affiliates, partially offset by higher selling, general and administrative expenses, interest expense, and provision for income taxes.

Operating cash flows were $170m, down 33% compared to 2Q’23, primarily due to the timing of collections in the prior year.

Capital returned to shareholders totaled $118 m during the quarter, consisting of $97m in share repurchases, inclusive of $96m of open market repurchases and $1m of repurchases to satisfy requirements of equity compensation plans, and $21m in regular dividends.

Commentary on the Six Months Ended June 28, 2024

Revenues were $3.7bn, up 6% compared to YTD 2Q’23, primarily due to growth across Sustainable Technology Solutions; and within Government Solutions, new and on-contract growth across International, Defense & Intel, and Science and Space, partially offset by decline in Ukraine activity in Readiness & Sustainment.

Net income attributable to KBR was $199m, up $464m compared to YTD 2Q’23, primarily due to an after tax cash charge of $132m in connection with the settlement of a legacy legal matter and a non-cash charge of $314 m recorded in connection with the election of cash as the settlement method for our Convertible Notes and the repurchase of a portion of our Convertible Notes in the prior year that did not recur in the current year.

Adjusted EBITDA2 was $423m, up 13% compared to YTD 2Q’23, with Adjusted EBITDA2 margins of 11.5%, up 72 bps year-over-year.

Diluted earnings per share was $1.47, up $3.42 compared to YTD 2Q’23, primarily due to the increase in Net income attributable to KBR noted above. Adjusted earnings per share2 was $1.59, up $0.18 compared to YTD 2Q’23, due to increases in gross profit and equity in earnings of unconsolidated affiliates, partially offset by higher selling, general and administrative expenses, interest expense, other non-operating expenses and provision for income taxes.

Operating cash flows were $261m, down 9% compared to YTD 2Q’23, primarily due to timing of collections.

Capital returned to shareholders totaled $197m during the year to date period, consisting of $158m in share repurchases, inclusive of $146 m of open market repurchases and $12m of repurchases to satisfy requirements of equity compensation plans, and $39m in regular dividends.

Anticipated Acquisition of LinQuest

On July 16, 2024, KBR announced it had entered into a definitive agreement to acquire LinQuest Corporation for $737m, net of modest expected tax benefits. Excluding the expected tax benefits, the base purchase price to be paid is $745 m, subject to certain working capital, net debt and other customary adjustments. The transaction is expected to be accretive to Adjusted EPS2, which excludes amortization from purchased intangible assets and non-recurring transaction costs. KBR will utilize a combination of cash and existing debt capacity to fund the transaction, which is expected to close in Q3 or Q4 this year.

Updated Fiscal 2024 Guidance

The table below summarizes updated FY24 guidance and represents our views as of July 24, 2024. Updated guidance does not reflect the anticipated acquisition of LinQuest.

The company does not provide a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure on a forward-looking basis because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings, unusual gains and losses, and acquisition-related expenses without unreasonable effort, which could be material to the company’s results computed in accordance with GAAP.

24 Jul 24. Rheinmetall’s profit doubles as defence spending surges.

Summary

Confirms 2024 sales, earnings forecast
Receives order for ammunition factory in Ukraine
Shares up 2.4% after results

German arms manufacturer Rheinmetall, more than doubled operating profit in the second quarter, driven by a surge in defence spending as a result of Russia’s invasion of Ukraine.

The company has been one of the main beneficiaries of the defence boom since the Ukraine war began in 2022. Its chief executive, Armin Papperger, was reportedly the target of a Russian assassination plot. The Kremlin denied the reports.

The maker of the Leopard 2 tank said that during the second quarter it received 11.4bn euros in orders and in new framework deals that could later translate into firm orders.

The company said this was mainly due to orders from the German army using funds from a 100-bn-euro special fund created after the invasion of Ukraine to bolster the country’s armed forces.

The German company also said it had received an order from the Ukrainian government for the construction of an ammunition factory in Ukraine.

Operating earnings in April-June rose 111% year-on-year to 271m euros ($293 m) beating expectations for 226 m, while the operating profit margin rose to 12.1%, above the consensus for 11.0%, based on the preliminary numbers, the German company said.

Sales rose 49% to 2.23bn euros, above market expectations of 2.06 bn.

The second-quarter sales figures were boosted by early sales recognition in its weapons and munitions division, as well as a higher sales contribution from its Madrid-based ammunitions subsidiary Expal Munitions, Rheinmetall said.

Rheinmetall confirmed its guidance for record sales of 10bn euros and an operating profit margin of 14-15% this year, up from 12.8% in 2023.

The company will report the full financial results on Aug. 8. ($1 = 0.9222 euros) (Source: Google/Reuters)

24 Jul 24. Amphenol Reports Record Second Quarter 2024 Results and Announces Dividend Increase.

Second Quarter 2024 Highlights:

Record sales of $3.61bn, up 18% in U.S. dollars and 11% organically compared to the second quarter of 2023
GAAP Diluted EPS of $0.41, up 11% compared to prior year
Record Adjusted Diluted EPS of $0.44, up 22% compared to prior year
GAAP and record Adjusted Operating Margin of 19.4% and 21.3%, respectively
Operating and Free Cash Flow of $664m and $528m, respectively
Announces deal to acquire Lutze, with Lutze US closed during the quarter and Lutze Europe expected to close in the third quarter
Completed previously announced acquisition of CIT and in July signed deal to acquire CommScope’s mobile networks-related businesses
Increases quarterly dividend by 50% to $0.165 per share

Amphenol Corporation (NYSE: APH) today reported second quarter 2024 results.

“We are pleased to have closed the second quarter of 2024 with record sales and Adjusted Diluted EPS both exceeding the high end of our guidance”

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“We are pleased to have closed the second quarter of 2024 with record sales and Adjusted Diluted EPS both exceeding the high end of our guidance,” said Amphenol President and Chief Executive Officer, R. Adam Norwitt. “Sales increased from prior year by 18%, primarily driven by growth in the IT datacom, defense, commercial air, mobile devices, mobile networks and automotive markets, as well as contributions from the Company’s acquisition program, partially offset by organic moderations in the broadband and industrial markets. During the quarter, we again realized strong profitability with Adjusted Operating Margin reaching a record 21.3%. We are very proud of the Company’s outstanding performance during the quarter.”

The Company continues to deploy its financial strength in a variety of ways to increase shareholder value. During the quarter, the Company purchased 3.1 m shares of its common stock for $190 m and paid dividends of $132 m, resulting in total capital returned to shareholders of more than $320 m.

Amphenol remains focused on expanding its growth opportunities through a deep commitment to developing enabling technologies for customers across our served markets, an ongoing strategy of market and geographic diversification as well as an active and successful acquisition program. To that end, the Company is excited to have closed the acquisition of Carlisle Interconnect Technologies (CIT) on May 21, as previously announced. During the quarter, Amphenol also signed a definitive agreement to acquire Lutze, a leading provider of harsh environment cable and cable assembly solutions for high-technology applications in the industrial market. The acquisition includes two businesses: Lutze US, based in North Carolina, and Lutze Europe, based in Germany. In May, we closed on Lutze US, which has annual sales of approximately $75 m, and we expect to close on Lutze Europe, which has annual sales of approximately $100 m, by the end of the third quarter of 2024. Both the CIT and Lutze businesses are reported in our Harsh Environment Solutions segment.

Finally, as disclosed last week, Amphenol has entered into a definitive agreement to acquire CommScope’s mobile networks-related businesses.

Increase in Quarterly Dividend

On July 23, 2024, Amphenol’s Board of Directors approved a 50% increase in the Company’s quarterly dividend, from $0.11 per share to $0.165 per share. The new dividend amount will be paid on October 9, 2024 to shareholders of record as of September 17, 2024.

Third Quarter 2024 Outlook

Assuming the continuation of current market conditions as well as constant exchange rates, for the third quarter of 2024, Amphenol expects sales to be in the range of $3.70bn to $3.80bn. This represents a 16% to 19% increase over the prior year quarter. Adjusted Diluted EPS is expected to be in the range of $0.43 to $0.45, representing a 10% to 15% increase from the third quarter of 2023. This guidance does not include the impact of acquisitions that have not yet closed.

Mr. Norwitt continued, “I am very pleased with the Company’s second quarter 2024 results. The revolution in electronics continues to accelerate, with new innovations creating exciting growth opportunities for Amphenol across each of our diversified end markets. In turn, we have expanded our range of high-technology interconnect products, both through our organic innovation efforts as well as through our successful acquisition program. This expanded technology position coupled with our unique entrepreneurial culture has strengthened our competitive advantage. Our ongoing drive to leverage that competitive advantage and thereby create sustained financial strength has established an excellent base for the Company’s future performance. I am confident in the ability of our outstanding and growing entrepreneurial management team to continue to dynamically adjust to changing market conditions, to capitalize on the wide array of growth opportunities that arise in all market cycles and to continue to generate sustainable long-term value for our shareholders and other stakeholders.”

2-for-1 Stock Split

As announced on May 20, 2024, the Company’s Board of Directors approved a 2-for-1 stock split, which was paid in the form of a stock dividend to shareholders of record as of the close of business on May 31, 2024. The additional shares were distributed on June 11, 2024 and the Company’s common stock began trading on a split-adjusted basis on June 12, 2024. The effect of the stock split on the Company’s financial results, including all share and per share data for both the current and prior year periods, as well as the quarterly dividend is reflected in this press release. (Source: BUSINESS WIRE)

24 Jul 24. Teledyne Technologies Reports Second Quarter Results.

Teledyne Technologies Incorporated (NYSE:TDY):

“Our earnings exceeded expectations, orders were greater than sales for the third consecutive quarter, and we ended the period with record backlog. Therefore, we are reasonably confident that quarterly sales will again increase sequentially, and we will return to year-over-year growth in the second half of 2024.”

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Orders exceeded sales for the third consecutive quarter
Second quarter sales of $1,374.1m
Second quarter GAAP operating margin of 18.0% and second quarter non-GAAP operating margin of 21.6%
GAAP diluted earnings per share of $3.77 and second quarter non-GAAP diluted earnings per share of $4.58
All-time record cash from operations of $318.7m and free cash flow of $301.0m
Full year 2024 GAAP diluted earnings per share outlook of $15.87 to $16.13 and affirming full year 2024 non-GAAP earnings per share outlook of $19.25 to $19.45
Debt maturity payment of $450m
Completed the acquisitions of Valeport and Adimec for aggregate consideration of $123.6m
Capital deployment through July 2024 includes estimated stock repurchases of approximately $278m
Quarter-end Consolidated Leverage Ratio of 1.7x
Stock repurchases expected to continue under the current $1.25bn authorization

Teledyne today reported second quarter 2024 net sales of $1,374.1m, compared with net sales of $1,424.7 m for the second quarter of 2023, a decrease of 3.6%. Net income attributable to Teledyne was $180.2m ($3.77 diluted earnings per share) for the second quarter of 2024, compared with $185.3m ($3.87 diluted earnings per share) for the second quarter of 2023, a decrease of 2.8%. The second quarter of 2024 included $49.1m of pretax acquired intangible asset amortization expense, $1.0m of pretax FLIR integration costs and $0.2m of FLIR acquisition-related discrete income tax expense. Excluding these items, non-GAAP net income attributable to Teledyne for the second quarter of 2024 was $218.7m ($4.58 diluted earnings per share). The second quarter of 2023 included $49.3m of pretax acquired intangible asset amortization expense and $0.4m of FLIR acquisition-related discrete income tax expense. Excluding these items, non-GAAP net income attributable to Teledyne for the second quarter of 2023 was $223.7m ($4.67 diluted earnings per share). Operating margin was 18.0% for the both the second quarter of 2024 and the second quarter of 2023. Excluding the non-GAAP items discussed above, non-GAAP operating margin for the second quarter of 2024 was 21.6%, compared with 21.4% for the second quarter of 2023.

“In the second quarter, Teledyne achieved all-time record free cash flow, allowing us to deploy approximately $852 m on debt repayment, acquisitions and stock repurchases through July,” said Robert Mehrabian, Executive Chairman. “Our earnings exceeded expectations, orders were greater than sales for the third consecutive quarter, and we ended the period with record backlog. Therefore, we are reasonably confident that quarterly sales will again increase sequentially, and we will return to year-over-year growth in the second half of 2024.”

Review of Operations

Comparisons are with the second quarter of 2023, unless noted otherwise.

Digital Imaging

The Digital Imaging segment’s second quarter 2024 net sales were $739.4m, compared with $793.3m, a decrease of 6.8%. Operating income was $113.5m for the second quarter of 2024, compared with $124.6m, a decrease of 8.9%. The second quarter of 2024 included $1.0m of pretax FLIR integration costs, and there were no comparable costs in the second quarter of 2023. Acquired intangible amortization expense for the second quarter of 2024 was $45.4m compared with $45.6m. Excluding these items, non-GAAP operating income for the second quarter of 2024 was $159.9m, compared with $170.2m, a decrease of 6.1%.

The second quarter of 2024 net sales decreased primarily due to lower sales of industrial automation imaging systems, X-ray products and commercial infrared imaging systems, partially offset by higher sales of infrared detectors and surveillance systems. The decrease in operating income was primarily due to lower sales and unfavorable product mix, including less industrial automation imaging systems sales.

Instrumentation

The Instrumentation segment’s second quarter 2024 net sales were $333.5m, compared with $328.4m, an increase of 1.6%. Operating income was $87.2m for the second quarter of 2024, compared with $81.4m, an increase of 7.1%.

The second quarter of 2024 net sales increase resulted from a $20.4m increase in sales of marine instrumentation primarily due to stronger offshore energy and defense markets, partially offset by a $13.5m decrease in sales of electronic test and measurement instrumentation as well as a $1.8m decrease in sales of environmental instrumentation. The increase in operating income primarily reflected the impact of higher marine instrumentation sales as well as favorable marine instrumentation product mix.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s second quarter 2024 net sales were $194.4m, compared with $186.0m, an increase of 4.5%. Operating income was $57.1m for the second quarter of 2024, compared with $53.2 m, an increase of 7.3%.

The second quarter of 2024 net sales reflected higher sales of $4.0m for aerospace electronics and $4.4m for defense electronics. The increase in operating income primarily reflected the impact of higher sales and improved product margins.

Engineered Systems

The Engineered Systems segment’s second quarter 2024 net sales were $106.8m, compared with $117.0m, a decrease of 8.7%. Operating income was $7.5m for the second quarter of 2024, compared with $11.5m, a decrease of 34.8%.

The second quarter of 2024 net sales reflected lower sales of $8.9m for engineered products and lower sales of $1.3m for energy systems. The lower sales for engineered products primarily reflected decreased sales from missile defense and maritime programs. The decrease in operating income was primarily driven by lower sales and unfavorable program mix.

Additional Financial Information

Cash Flow

Cash provided by operating activities was $318.7m for the second quarter of 2024 compared with $190.5m, with the increase driven by stronger working capital conversion in the second quarter of 2024. Depreciation and amortization expense for the second quarter of 2024 was $77.8m compared with $80.0m. Stock-based compensation expense for the second quarter of 2024 was $9.3m compared with $8.4m.

Capital expenditures for the second quarter of 2024 were $17.7m compared with $27.3m. Teledyne received $2.4 m from the exercise of stock options in the second quarter of 2024 compared with $4.8m. During the second quarter of 2024, the Company completed the acquisitions of Valeport and Adimec for aggregate consideration of $123.6m.

During the second quarter of 2024, the Company repurchased approximately 0.5m shares for $193.8m.

As of June 30, 2024, net debt was $2,354.2m which is calculated as total debt of $2,797.4m, net of cash and cash equivalents of $443.2m. As of December 31, 2023, net debt was $2,596.6m representing total debt of $3,244.9m, net of cash and cash equivalents of $648.3m. During the second quarter of 2024, the Company made a $450m debt maturity payment.

During the second quarter of 2024, the Company amended and restated its credit facility which extended the maturity date to June 2029 as well as increased the available borrowing capacity to $1.20bn. As of June 30, 2024, $1,177.7m was available under the $1.20bn credit facility, after reductions of $22.3m in outstanding letters of credit.

Income Taxes

The effective tax rate for the second quarter of 2024 was 22.2%, compared with 21.0%. The second quarter of 2024 reflected net discrete income tax benefits of $0.7m compared with $1.4m.

Other

Corporate expense was $18.3m for the second quarter of 2024 compared with $14.6m, with the increase driven primarily by increased legal contingencies as well as higher compensation costs. Non-service retirement benefit income was $2.7m for the second quarter of 2024 compared with $2.9m. Interest expense, net of interest income, was $15.8m for the second quarter of 2024 compared with $22.3m, with the decrease due to reduced outstanding borrowings with lower weighted average interest rates compared to the second quarter of 2023.

Outlook

Based on its current outlook, the company’s management believes that third quarter 2024 GAAP diluted earnings per share will be in the range of $4.02 to $4.16 and full year 2024 GAAP diluted earnings per share will be in the range of $15.87 to $16.13. The company’s management further believes that third quarter 2024 non-GAAP diluted earnings per share will be in the range of $4.90 to $5.00 and full year 2024 non-GAAP diluted earnings per share will be in the range of $19.25 to $19.45. The non-GAAP outlook excludes acquired intangible asset amortization for all acquisitions, further FLIR integration costs and FLIR acquisition-related tax matters. (Source: BUSINESS WIRE)

24 Jul 24. Astrion, a Brightstar Capital Partners Portfolio Company, to Acquire Axient. Astrion, a leading provider of mission support and advanced engineering services, announced today that it has signed a definitive agreement to acquire Axient, a highly regarded provider of specialized engineering solutions. Astrion is a portfolio company of Brightstar Capital Partners (Brightstar), a middle market private equity firm.

“Together, we will deliver elevated solutions for military and civilian agencies, delivering Results with Impact to critical global challenges.”

Post this

Astrion is a partner for progress, providing cutting-edge services that boost preparedness, optimize performance, and ensure mission success for defense and federal agencies, including the Army, Air Force, Civilian Agencies, Navy and Space. Axient is a systems integrator advancing defense and civil missions from aerospace to cyberspace with multi-domain test and analysis, mission engineering and operations, and advanced technologies.

This strategic acquisition positions Astrion to significantly enhance its capabilities, increase opportunities for the combined employee base, expand its market presence, and deliver greater value to its customers.

“At Astrion, our mission extends beyond today. We are committed to the extraordinary and making our nation more resilient for future generations. Axient’s specialized capabilities, talented employees and robust customer base make it a highly complementary fit with Astrion,” said Dave Zolet, CEO of Astrion. “Together, we will deliver elevated solutions for military and civilian agencies, delivering Results with Impact to critical global challenges.”

“We believe this combination strengthens and expands the collective capabilities and services portfolio, and at a scale that creates advantages for our customers and stakeholders,” commented Michael Singer, Partner at Brightstar. “We look forward to welcoming the expert Axient team and supporting Astrion’s continued investment in customer innovation and mission delivery.”

“We are excited to join the Astrion team. Our shared commitment to customer success and innovation will allow us to deliver more comprehensive, innovative solutions for our customers’ mission-critical challenges,” said Randy Cash, President & CEO of Axient.

The transaction is expected to close in the third quarter of 2024, subject to customary closing conditions, regulatory and government approvals.

JPMorgan Securities LLC and Jefferies LLC are serving as financial advisors, and Kirkland & Ellis LLP is serving as legal counsel to Astrion. KippsDeSanto & Co. and Stone Key Partners LLC are serving as financial advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Morrison & Foerster LLP are serving as legal counsel to Axient.

(Source: BUSINESS WIRE)

24 Jul 24. Lower G700 business jet deliveries hit General Dynamics results, shares fall. General Dynamics, second-quarter revenue above Wall street estimates on Wednesday, but profit slightly missed and fewer high end jets were delivered than expected, and its shares fell 5%.

Despite a 50% increase in business jet deliveries in the quarter, the Gulfstream parent only handed over 11 of its top-of-the-line, most expensive G700 business jets, below the company target of 15.

The U.S. Federal Aviation Administration certified the G700 business jet just days before the quarter began, however persisting supply chain issues caused delivery delays.

“Q2’s EPS miss reflected a large shortfall at Gulfstream, which outweighed robust defense results,” TD Cowen analysts said in a note, adding that they expected investors to be disappointed.

The defense contractor reported an 18% rise in second-quarter revenue on Wednesday, helped by higher demand for its ammunition and nuclear-powered submarines.

“In the Aerospace segment, we are continuing to ramp up the pace of our G700 deliveries and our defense businesses continued to grow, reflecting increased demand in response to the threat environment,” CEO Phebe Novakovic said in a statement.

Despite cost pressures due to constraints on the U.S. defense budget, defense firms continue to see strong demand for military equipment amid ongoing geopolitical conflicts.

00:26Asian shares hammered by jitters over Big Tech earnings

Profits at General Dynamics’ combat systems unit, which makes vehicles and tanks, were $313 m in the quarter, up 25% from a year ago.

The company now sees combat systems’ annual revenue at $8.7bn, a $200m hike from its prior forecast.

It also lifted the full-year revenue forecast for its marine systems segment, which builds nuclear-powered submarines and ships, by $1 bn and now expects $13.4bn to $13.8bn. (Source: Reuters)

24 Jul 24. General Dynamics Reports Second-Quarter 2024 Financial Results.

Revenue of $12bn, up 18% from year-ago quarter
Operating earnings of $1.2bn, up 20.2% from year-ago quarter
Diluted EPS of $3.26, up 20.7% from year-ago quarter
Operating margin of 9.7%, a 20-basis-point expansion from year-ago General Dynamics (NYSE: GD) today reported second-quarter 2024 revenue of $12bn, up 18% from the second quarter of 2023. Operating earnings of $1.2bn were up 20.2% from the year-ago quarter. Diluted earnings per share (EPS) were $3.26, up 20.7% from the year-ago quarter. Operating margin for the quarter was 9.7%, a 20-basis point expansion from the year-ago quarter, with particular strength in the Technologies and Combat Systems segments. “This was a strong quarter overall, as reflected by solid growth in all key measures from a year ago. Our businesses continue to focus on disciplined execution of their programs, cost and schedule,” said Phebe N. Novakovic, chairman and chief executive officer. “In the Aerospace segment, we are continuing to ramp up the pace of our G700 deliveries and our defense businesses continued to grow, reflecting increased demand in response to the threat environment.” Gulfstream delivered 37 aircraft in the quarter, 31 of which were large-cabin aircraft. This compares with 24 aircraft delivered in the year-ago quarter, of which 18 were large-cabin. Cash and Capital Deployment Net cash provided by operating activities in the quarter was $814m, or 90% of net earnings. During the quarter, the company paid $389m in dividends, invested $201m in capital expenditures, and used $34 m to repurchase shares, ending the quarter with $1.4bn in cash and equivalents on hand. Orders and Backlog The consolidated book-to-bill ratio, defined as orders divided by revenue, was 0.8-to-1 for the quarter. Company-wide backlog was $91.3bn. Estimated potential contract value, representing management’s estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, was $38.5bn. Total estimated contract value, the sum of all backlog components, was $129.8bn.– more In the Aerospace segment, orders in the quarter totaled $2.7bn. Aerospace backlog of $20bn is 2.8% above the year-ago quarter. In the defense segments, orders in the quarter totaled $7.4bn, with particular strength in Combat Systems, which had a bookto-bill ratio of 1.5-to-1. Significant awards in the defense segments included two contracts from the Canadian government, with options having combined maximum potential value of $1.9bn shared with an industry partner, for the Logistics Vehicle Modernization (LVM) program; $205 m, with options having a maximum potential value of $1.1bn, for planning yard services for the Arleigh Burke-class (DDG-51) guided-missile destroyer program; a $25m contract from the U.S. Army, with maximum potential value of $535m, for systems technical support of the Stryker vehicle fleet; $205m, with options having a maximum potential value of $525m, from the North Carolina Department of Health and Human Services to operate its Medicaid Management Information System; various munitions and ordnance contracts with maximum potential value totaling $460m if all options are exercised; and several key contracts for classified customers with maximum potential value of $665m. A detailed list of significant awards is provided in Exhibit I.

24 Jul 24. Political storms won’t curb military spending boom, defence firms say.

Summary
China, Russia threats to support defence spending, execs say
Trump election win wouldn’t concern industry, analysts
UK’s new Labour government positive for weapons makers
French legislature gridlock worries industry

Defence firms are confident Western governments will continue to increase spending on weapons to counter Russia and China, brushing off concerns that political upheaval in the United States and Europe could curb military budgets.

Global defence spending hit a record $2.4trn last year, boosted by the war in Ukraine and rising tensions between China and the West, according to think-tank Stockholm International Peace Research Institute (SIPRI).

NATO members agreed to further boost spending at a summit in Washington this month.

But major recent political shifts in the United Kingdom, the United States and France – all top military spenders – have spooked some investors who think support for the war in Ukraine could ebb in the years ahead.

Industry executives at the Farnborough Airshow, one of the world’s largest gatherings of aerospace and defence companies, told Reuters that even if aid to Ukraine was reduced, Western governments would spend big to shore up defences for potential future conflicts with Russia and China.

“Ukraine has given one important lesson learned: if you don’t prepare, you’ve lost,” said Lorenzo Mariani, co-general manager of Leonardo, an Italian defence firm.

Visible evidence of geopolitical tensions were laid out across the airfield in southern England that serves as a jet showroom and arms bazaar every other year, from prototype armed drones to U.S. and European fighter planes.

Even an Air India A350 passenger jet parked on the tarmac in front of exhibitor chalets bore traces of the conflict on Europe’s border, since it was originally built by Airbus for Russia’s Aeroflot before switching owners due to sanctions.

The rush for arms since Russia’s full-scale invasion of Ukraine in 2022 has boosted the profits and share prices of U.S. defence giants like Lockheed Martin, and Raytheon as well as European companies including Leonardo and Britain’s BAE Systems.

For instance, shares in Germany’s Rheinmetall, are up 390% since Russia’s invasion of Ukraine, while Swedish defence manufacturer Saab’s (SAABb.ST), are up more than 340%. (Source: Reuters)

23 Jul 24. Terran Orbital Announces up to $98m of New Capital Through ATM Program.

Terran Orbital Corporation (NYSE: LLAP), a global leader in satellite-based solutions primarily serving the aerospace and defense industries (the “Company”), today announced the launch of an at-the-market offering program (the “ATM”), which will allow the Company to offer its common stock, from time to time, in transactions that are deemed to be “at the market” offerings not to exceed an aggregate amount of $98,000,000. Notwithstanding the foregoing, pursuant to certain of the Company’s debt documents, the Company is limited to selling 26,362,513 shares of its common stock under the at-the-market program unless the Company obtains the required consent to sell more shares of common stock. Sales pursuant to the ATM will be conducted through the Company’s sales agent, H.C. Wainwright & Co., LLC.

“As opportunities from our business pipeline convert to awards, we want to give our customers and vendors additional confidence that we have adequate capital to successfully manage current and future programs,” said Marc Bell, Co-Founder, Chairman, and Chief Executive Officer of Terran Orbital. “We are confident that the ATM announced today will allow us to deliver maximum value to our customers and other stakeholders.”

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction. (Source: BUSINESS WIRE)

23 Jul 24. Luna Announces Appointment of Kevin Ilcisin as CEO, Retirement of Richard Roedel and $15m Credit Facility from White Hat Capital Partners. Luna Innovations Incorporated (NASDAQ: LUNA) (the “Company”), a global leader in advanced fiber optic-based technology, today announced the appointment of Kevin Ilcisin as its new President and Chief Executive Officer, the retirement of Richard Roedel from the Board of Directors (the “Board”) after nearly 20 years of service, and the closing of a $15 m junior secured term loan facility (the “Loan Facility”).

Effective August 1, 2024, Mr. Ilcisin will assume his new role as the President, CEO and member of the Board of the Company. Mr. Ilcisin has been a strategic advisor to the Company since April 2024, bringing a wealth of experience, industry knowledge and strategic leadership. Mr. Ilcisin is the co-founder of the advisory firm Juniper Strategies. Previously, Mr. Ilcisin served as Senior Vice President of Strategy and Corporate Development at National Instruments, where he was responsible for corporate strategy and led all of National Instruments’ acquisitions and divestitures. Prior to National Instruments, Mr. Ilcisin was the Chief Technology officer of Tektronix, a subsidiary of Fortive, a spin-off of Danaher Corporation, where he managed strategic planning and technology growth initiatives. Mr. Ilcisin has also held several executive roles in the semiconductor equipment, consumer electronics, and energy research industries.

Mr. Ilcisin holds a Ph.D. and M.A. degrees in Plasma Physics from Princeton University and B.Sc. in Electrical Engineering with Distinction from the University of Alberta.

Warren B. (Barry) Phelps, III, Chair of the Board, said, “The Board welcomes Kevin to the leadership team and is confident that he is well-positioned to lead Luna with respect to its pursuit of opportunities for growth and strategic alternatives.”

Mr. Ilcisin commented, “I am honored to be named President and CEO at Luna. During my time as a strategic consultant, I saw firsthand Luna’s leading market position and was deeply impressed by the dedication and passion of our talented employees. I remain confident in Luna’s tremendous potential and look forward to leading our efforts to execute Luna’s strategy and deliver on that potential.”

Retirement of Richard Roedel:

Mr. Ilcisin succeeds Richard Roedel, who informed the Board on July 12, 2024, that, after nearly 20 years of dedicated service to the Company, he was stepping down as Interim President and Interim Executive Chairman of the Company due to health reasons, effective immediately.

Mr. Roedel commented, “As I reflect on my tenure and all we’ve accomplished at Luna, I am grateful for the talented and dedicated individuals with whom I have had the privilege to serve. I am proud of the strong and diverse Board that we have assembled and am excited to see what the future holds for Luna.”

On July 16, 2024, Warren B. (Barry) Phelps, III was appointed Chair of the Board of Directors. Mr. Phelps has served as a member of the Board since 2017. Mr. Phelps serves as the chair of the Board’s Audit Committee and as a member of the Compensation Committee.

Mr. Phelps said of Mr. Roedel’s retirement, “On behalf of the Board, I would like to thank Rich for his steadfast commitment and unparalleled service to Luna. Throughout his tenure, Rich’s technical skills, business acumen and insightful contributions to the Board and Luna have been instrumental in shaping the company’s growth and success.”

$15m Loan Agreement:

The new Loan Facility represents the second strategic investment in the Company by White Hat Capital Partners LP (“White Hat”), an investment firm focused on sustainable value creation in technology companies serving mission-critical applications. White Hat made an initial $50 m preferred stock investment in the Company in December 2023. An initial draw of $9 m was made upon the closing of the Loan Facility, with up to an additional $6m available for future draws, subject to certain conditions. The obligations under the Loan Facility are secured by a second priority lien on substantially all of the Company’s assets. The proceeds of the Loan Facility will be used for working capital as well as the Company’s ongoing strategic alternatives process.

About Luna

Luna Innovations Incorporated (www.lunainc.com) is a leader in optical technology, providing unique capabilities in high-performance, fiber optic-based, test products for the telecommunications industry and distributed fiber optic-based sensing for a multitude of industries. Luna’s business model is designed to accelerate the process of bringing new and innovative technologies to market. (Source: BUSINESS WIRE)

23 Jul 24. Dassault Aviation’s H1 net sales climb, despite ongoing supply chain issues. French planemaker Dassault Aviation (AM.PA) reported on Tuesday first half adjusted net sales of 2.54 bn euros ($2.76 bn), up from 2.30 bn euros over the same period last year.

The increase was driven by the delivery of 12 Falcon business jets and six Rafale France, slightly recovering from last year’s slump caused by supply chain issues, although the French group did not completely overcome the bottlenecks.

“There are many shortages in our production lines due to supplier inefficiencies in some cases, especially in the aerostructure sector,” it said.

The French group reaffirmed its forecasts for the year.

France has emerged as the second-largest arms exporter in the world, outpaced only by the U.S., according to a study published in March by leading conflict think-tank SIPRI. France’s surge up the rankings comes thanks to major deals for Dassault Aviation’s Rafale fighter jet, signed with Qatar, Egypt and India, which opted for French-made aircrafts over Russian ones.

“In France, the President of the Republic, as head of the armed forces, wrote to defense manufacturers urging them to step up their efforts in the context of a war economy. In response to this call, I instructed Dassault Aviation employees to prioritize Rafale production, for both France and for Export,” Chief Executive Officer Éric Trappier said in a statement.

Dassault’s order backlog stood at 41.16bn euros at the end of June and included 223 Rafale warplanes and 83 Falcon business jets, the group said.

The French group said its adjusted operating income for the January-June period rose to 170m euros from 151m euros a year earlier. (Source: Reuters)

23 Jul 24. Lockheed Martin lifts 2024 sales target on fighter jet, missile demand. U.S. defense company Lockheed Martin (LMT.N raised its annual sales target on Tuesday, following the unexpected resumption of deliveries of its F-35 aircraft after the Pentagon began accepting the jets last week.

It expects 2024 sales to be between $70.5bn and $71.5bn, versus $68.5bn to $70bn forecast earlier.

Shares of the Bethesda, Maryland-based company were up 3.2% in morning trade.

The U.S. resumed taking F-35 deliveries after a months-long pause on delays on its software upgrade. Lockheed has been upgrading the jets under Technology Refresh 3, or TR-3 program, that gives the F-35 better displays and processing power.

The delivery resumption includes incomplete software upgrades and Pentagon will withhold some payment, the details of which is unknown, until the remaining enhancements are finished.

Lockheed’s F-35 is the world’s largest defense program and contributes around 30% of the company’s revenue.

“The F-35 remains a top priority, and we recently delivered the first TR-3-configured aircraft to the customer and anticipate deliveries for 2024 to meet our expected range of 75-110 F-35s,” said CEO Jim Taiclet.

TR-3 involves both hardware and software improvements and is seen as a pillar of a wider upgrade to the stealth jet known as Block 4.

00:13Tesla misses earnings targets for fourth-straight quarter

The enhancements “are critical steps in ensuring the F-35 remains the most advanced fighter aircraft in the world and the key air vehicle node in the DoD’s joint all domain architecture”, Taiclet said.

Lockheed, however, does not expect the full tech refresh package to be ready for months.

Lockheed’s second-quarter net income of $6.85 per share beat LSEG estimates of $6.46 per share. Total quarterly sales rose 8.5% to $18.12bn, also above the $17.04bn estimated. (Source: Reuters)

23 Jul 24. Lockheed Martin Reports Second Quarter 2024 Financial Results.

Net sales of $18.1bn, an increase of 9% year over year
Net earnings of $1.6bn, or $6.85 per share, inclusive of net non-operational charges of $79m ($63m, or $0.26 per share, after-tax)
Cash from operations of $1.9bn and free cash flow of $1.5bn
$1.6bn of cash returned to shareholders through dividends and share repurchases
2024 outlook increased for sales, segment operating profit and earnings per share

Lockheed Martin Corporation [NYSE: LMT] today reported second quarter 2024 net sales of $18.1bn, compared to $16.7bn in the second quarter of 2023. Net earnings in the second quarter of 2024 were $1.6bn, or $6.85 per share, compared to $1.7bn, or $6.63 per share, in the second quarter of 2023. Cash from operations was $1.9 bn in the second quarter of 2024, compared to $1.1bn in the second quarter of 2023. Free cash flow was $1.5bn in the second quarter of 2024, compared to $771 m in the second quarter of 2023.

“Over the past few months, Lockheed Martin’s people, systems, and platforms have again demonstrated their ability to enhance security in Eastern Europe, the Red Sea, and the Middle East. From the PAC-3’s critical role in air defense, to the Aegis Combat System with AI augmentation, to the F-35 with its advanced sensor and data management capabilities, our company has made major contributions to allied and partner defense. We continue to demonstrate the impact of our 21st Century Security® strategy by harnessing the latest digital technologies to continuously improve mission effectiveness, strengthening and scaling the defense production system, and expanding industrial cooperation among our allies and partners. Consequently, demand for our defense technology solutions remains robust, with a backlog of nearly $160 bn, greater than two times annual revenue,” said Lockheed Martin Chairman, President and CEO Jim Taiclet.

“We delivered strong second quarter financial results, with year-over-year growth of 9% in sales and 10% in segment operating profit, and free cash flow generation in excess of $1.5bn. The year-to-date performance gives us confidence to raise our 2024 full-year outlook for sales, segment operating profit, and earnings per share. Operationally, the F-35 remains a top priority, and we recently delivered the first Technology Refresh 3-configured aircraft to the customer and anticipate deliveries for 2024 to meet our expected range of 75-110 F-35s. The TR-3 hardware and software update enables step function improvement in capability to our airmen, sailors, and marines, as well as to our partner and allied nations. This foundational upgrade and the follow-on series of enhancements, known as Block 4, are critical steps in ensuring the F-35 remains the most advanced fighter aircraft in the world and the key air vehicle node in the DoD’s joint all domain architecture.”

2024 Financial Outlook

The following table and other sections of this news release contain forward-looking statements, which are based on the company’s current expectations. Actual results may differ materially from those projected. It is the company’s practice not to incorporate adjustments into its financial outlook for proposed or potential acquisitions, divestitures, ventures, pension risk transfer transactions, financing transactions, changes in law, or new accounting standards until such items have been consummated, enacted or adopted. For additional factors that may impact the company’s actual results, refer to the “Forward-Looking Statements” section in this news release.

Cash Flows and Capital Deployment Activities

The increase in operating and free cash flows in the second quarter of 2024 compared to the same period in 2023 was primarily due to improvements in working capital (defined as receivables, contract assets, and inventories less accounts payable and contract liabilities) and the timing of federal tax payments. Improvements in working capital were driven by volume and timing of milestone payments impacting both contract liabilities and contract assets on classified programs at the company’s Space business segment, decreases in inventory due to deliveries of S-70 helicopters at Sikorsky at the company’s RMS business segment, and production and billing cycle timing impacting receivables (primarily F-35 at Aeronautics and Integrated Air and Missile Defense at MFC, partially offset by Integrated warfare systems and sensors at RMS). These improvements were partially offset by the timing of cash payments related to accounts payable (primarily Aeronautics).

The company’s cash activities in the second quarter of 2024, included the following:

paying cash dividends of $752m;
paying $850m to repurchase 1.9m shares; and
making a long-term debt scheduled repayment of $168m.

Segment Results

The company operates in four business segments organized based on the nature of products and services offered: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. The following table presents summary operating results of the company’s business segments and reconciles these amounts to the company’s consolidated financial results.

The company’s consolidated net favorable profit booking rate adjustments represented approximately 21% and 20% of total segment operating profit in the quarters ended June 30, 2024 and June 25, 2023. During the quarter ended June 25, 2023, we recognized a favorable profit adjustment of $65m on an international surveillance and control program due to the positive resolution of a contractual matter, and an unfavorable profit adjustment of $100m on the Canadian Maritime Helicopter Program (CMHP) as a result of increased costs and lower than planned revenues.

Aeronautics

Aeronautics’ net sales in the second quarter of 2024 increased $402m, or 6%, compared to the same period in 2023. The increase was primarily attributable to higher net sales of $335m on the F-35 program due to higher volume on sustainment, development and production contracts; and $105m on the F-16 program due to the ramp up on production.

Aeronautics’ operating profit in the second quarter of 2024 increased $33m, or 5%, compared to the same period in 2023. The increase in operating profit was attributable to $35m from higher volume and program ramp up described above and $25m from favorable contract mix across the portfolio, partially offset by $25m of lower profit booking rate adjustments. The decrease in profit booking rate adjustments was due to a $45m unfavorable profit adjustment on a classified program because of higher than anticipated costs to maintain program objectives, partially offset by higher net favorable profit adjustments across the portfolio.

Missiles and Fire Control

MFC’s net sales in the second quarter of 2024 increased $347m, or 13%, compared to the same period in 2023. The increase was primarily attributable to higher net sales of $320m for tactical and strike missile programs due to production ramp up on Guided Multiple Launch Rocket Systems (GMLRS) and Long Range Anti-Ship Missile (LRASM) programs.

MFC’s operating profit in the second quarter of 2024 increased $79m, or 21%, compared to the same period in 2023, due to $80m of higher profit booking rate adjustments which primarily reflects higher favorable profit booking rate adjustments on PAC-3 and Apache due to better than anticipated cost performance. Additionally, operating profit increased $30m from production ramp up described above, offset by $30m decrease from contract mix.

Rotary and Mission Systems

RMS’ net sales in the second quarter of 2024 increased $651m, or 17%, compared to the same period in 2023. The increase was primarily attributable to higher net sales of $420m on integrated warfare systems and sensors (IWSS) programs due to higher volume on radar programs and the Canadian Surface Combatant (CSC) program, and new program ramp up within the laser systems portfolio; and $160m for Sikorsky helicopter programs due to higher production volume on Black Hawk and CH-53K programs.

RMS’ operating profit in the second quarter of 2024 increased $41m, or 9%, compared to the same period in 2023. The increase in operating profit was attributable to $70m from higher volume described above, partially offset by $20m of lower profit booking rate adjustments. The decrease in profit booking rate adjustments was due to unfavorable profit adjustments on Seahawk and Black Hawk production programs as a result of increased costs, partially offset by the net impact in the second quarter of 2023 of both a $65 m favorable profit adjustment on an international surveillance and control program and a $100m unfavorable profit adjustment on the Canadian Maritime Helicopter Program (CMHP) that did not recur in the second quarter of 2024.

Space

Space’s net sales in the second quarter of 2024 increased $29m, or 1%, compared to the same period in 2023. The increase was primarily attributable to higher net sales of $110m for strategic and missile defense programs due to higher volume on the hypersonics and Fleet Ballistic Missile (FBM) programs; partially offset by lower net sales of $50m for national security space due to lower volume on classified programs and $45m for commercial civil space due to lower volume on the Orion program.

Space’s operating profit in the second quarter of 2024 increased $34m, or 11%, compared to the same period in 2023. The increase in operating profit was attributable to $20m from favorable contract mix across the portfolio and $20m of higher profit booking rate adjustments. The increase in profit booking rate adjustments was due to higher favorable profit adjustments on the FBM program.

Total equity earnings/(losses) (primarily ULA) represented approximately $10m, or 3% of Space’s operating profit in the second quarter of 2024, compared to approximately $20m, or 6% for the same period in 2023.

Income Taxes

The company’s effective income tax rate was 15.8% and 16.2% for the quarters ended June 30, 2024 and June 25, 2023. The rates for both periods benefited from research and development tax credits, tax deductions for foreign derived intangible income and dividends paid to the company’s defined contribution plans with an employee stock ownership plan feature.

Use of Non-GAAP Financial Measures

This news release contains the following non-generally accepted accounting principles (non-GAAP) financial measures (as defined by U.S. Securities and Exchange Commission (SEC) Regulation G). While management believes that these non-GAAP financial measures may be useful in evaluating the financial performance of the company, this information should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. In addition, the company’s definitions for non-GAAP financial measures may differ from similarly titled measures used by other companies or analysts.

Business segment operating profit

Business segment operating profit represents operating profit from the company’s business segments before unallocated income and expense. This measure is used by the company’s senior management in evaluating the performance of its business segments and is a performance goal in the company’s annual incentive plan. Business segment operating margin is calculated by dividing business segment operating profit by sales. The table below reconciles the non-GAAP measure business segment operating profit with the most directly comparable GAAP financial measure, consolidated operating profit.

23 Jul 24. Thales H1 operating profit beats expectations, helped by strong orders. Europe’s largest defence electronics company Thales (TCFP.PA) on Tuesday slightly beat expectations for half-year operating profit, helped by strong demand from clients in the defence sphere.

Half-year operating income rose 10.4% to 1.096bn euros ($1.19bn), while a consensus provided by the company had expected 1.093bn.

Thales has benefited from rising demand for military gear, bolstered by renewed engagements of NATO countries in Ukraine and deals with various armies.

In June it signed three deals with Ukraine’s arms industry. CEO Patrice Caine told reporters in a call there could be more such agreements.

Its order intake, which is a measure of future sales, rose 26% in the half-year to 10.77bn euros, beating the consensus forecast of 10.38 bn.

Sales, which grew 8.9% to 9.49bn euros, were boosted by the Defence and Security segment, the company said, adding that in the Aerospace segment, a strong performance in avionics offset weaker trends in its space business.

Industry sources have said that Airbus (AIR.PA), and Thales were in discussions to tie-up some of their space operations, to better compete with U.S giants such as Elon Musk’s Starlink. In a call, CEO Patrice Caine declined to comment directly, while saying that such talks had been ongoing during his ten-year tenure as chief executive. The group confirmed its full-year outlook, but warned that its operating profit margin in the Space business would be negative due to falling demand for its telecom services and some restructuring costs. (Source: Reuters)

19 Jul 24. Defense tech startup Saronic announces $175m in Series B funding. The funding round was led by venture capital firm Andreessen Horowitz. Defense tech startup Saronic announced today it had successfully raised $175m in series B funding that its executives say will play a key role in allowing the company to rapidly scale production of its three autonomous surface vessels.

The funding round was led by venture capital firm Andreessen Horowitz, with participation from other firms including 8VC, Caffeinated Capital, Elad Gil and NightDragon, according to a company statement. In April, executives from Saronic told Breaking Defense they had raised around $70m to date, meaning today’s funding round more than doubles the previous total raised.

“What we’re doing now is really focusing on the building the thousands,” Dino Mavrookas, Saronic’s chief executive, told reporters today. “It’s scaling that manufacturing plant. It’s building the system that builds the system. It’s laying in the foundation for rapid scale.”

The Austin, Texas-based firm primarily focuses on designing and building autonomous surface vessels and currently produces a 6-foot (Spyglass) and 14-foot model (Cutlass), and is developing a 24-foot model (Corsair). The ASVs, as Saronic describes them, largely fit the characteristics that US Navy officials have proclaimed are necessary to build the future hybrid fleet: unmanned and autonomous vessels with open systems architecture capable of transporting a diverse range of payloads depending on the mission.

Similarly, Mavrookas’ focus on rapidly scaling production echoes the goals of Replicator, the initiative started by Deputy Defense Secretary Kathleen Hicks that dictates the Pentagon must field thousands of unmanned systems in under two years as a means of countering China. (Saronic deferred to the Pentagon when asked whether it has had any discussions with the Defense Department about Replicator.)

Rob Lehman, Saronic co-founder, told reporters on the same call the company’s participation in Integrated Battle Problem 24.1, a key military exercise the Navy uses to experiment with unmanned systems, was a “coming out party for Saronic.”

The competition for Warfighter Training and Readiness Solutions will bring together training networks, combat training centers and live ranges across the DoD enterprise.

“We went to San Diego and brought more boats than folks expected us to bring. And, frankly, we participated in more vignettes and parts of the exercise than were even planned,” he said. “Post Integrated Battle Problem, frankly, the demand signal has accelerated for the exercises, demonstrations … throughout the rest of [2024] and [2025] as well.”

(Source: Defense News Early Bird/Breaking Defense.com)

22 Jul 24. Acorn Growth Companies, a leading middle-market private equity firm specializing in aerospace, defense, intelligence, and space, announced its rebranding as Acorn Capital Management. This strategic name change aligns with Acorn’s continued growth and the development of multiple capital deployment strategies.

The unveiling of Acorn Capital Management at the prestigious Farnborough Air Show marks a pivotal moment in the firm’s history. For over twenty years, Acorn Growth Companies has been a trusted partner, investing in and supporting companies that drive innovation and excellence. As the firm continues to grow and diversify its investment strategies, the new name symbolizes a renewed focus on deploying capital in ways that address the strategic needs of these industries.

“Today marks a significant milestone for Acorn,” said Rick Nagel, CEO and Managing Partner. “This new name better represents our expanding vision and our dedication to supporting investments in areas of strategic importance. As Acorn continues to grow and develop innovative strategies for capital deployment, we remain committed to identifying and investing in opportunities that drive value and long-term success in the sectors we serve.”

Originally founded to provide early-stage capital, Acorn has evolved into a robust middle-market private equity firm investing in the aerospace sector. The recent launch of Acorn’s private credit fund, AltAero Aviation Finance, further solidifies Acorn’s commitment to diversifying its investment offerings and exploring opportunities beyond the traditional fund structure.

AltAero leverages Acorn’s extensive industry expertise and strong relationships to provide tailored financing solutions to companies operating in the aerospace sector. By filling the gap left by traditional leasing companies, AltAero aims to support the growth and development of businesses in this dynamic industry.

“AltAero enables Acorn to further support the aerospace industry and provide innovative financing solutions,” said Nagel. “By expanding its investment offerings and exploring non-traditional fund structures, Acorn is well-positioned to capitalize on emerging opportunities and drive further growth in this dynamic sector.”

Acorn has long been a leader in the aerospace and defense industry. The company was the first of its kind invited to join the Aerospace Industries Association (AIA). This prestigious membership extended Acorn a seat on the Board of Governors, marking a groundbreaking moment in AIA’s 100-year history. Acorn is also the first member of the financial community and a non-operator to serve on the Executive Committee.

Acorn’s inclusion brings a vital investor and capital perspective to the boardroom, addressing a long-standing underrepresentation of the financial sector in shaping policy and aligning with the Department of Defense (DOD) perspective. AIA’s bold decision to integrate the financial community’s voice underscores its commitment to a more inclusive and comprehensive approach to industry leadership and policy development.

“The need for the private sector to invest is stronger than ever, and Acorn is answering that call,” said Greg Agnew, Partner. “Our new name signifies not just a rebranding, but a renewed dedication to our partners, stakeholders, and the innovative companies we proudly support.”

About Acorn Capital Management

Acorn Capital Management is a middle-market private equity firm focused exclusively on Aerospace, Defense, Space, and Intelligence. Acorn invests solely in operating companies that strive to enhance global mobility and protect national interests. Acorn has a formidable reputation in the industry and is recognized for its deep understanding of the Aerospace and Defense markets, with proprietary access to the best companies within these sectors. With operational expertise and its ability to lead and manage investments through variable economic and industry cycles, Acorn works in tandem with management to build its portfolio companies into significant market leaders.

13 Jul 24. Alpine Space Ventures closes EUR170m startup investment fund to support primarily European portfolio of space sectors.

Alpine Space Ventures, an industry-insider led venture capital firm dedicated to early-stage investments in the burgeoning European space sector, today announced the final closing of its first fund with a total volume of EUR170m.

The fund primarily targets Series A rounds to build an initial position, investing in startups that serve or utilize the global space industry, with a particular focus on the industrialization of the space sector and hardware and software solutions around connectivity and data. Alpine Space Ventures has a major focus on investments into the European ecosystem, but has some geographic flexibility to invest in the United States and beyond leveraging the team’s industry relationships especially with the early leadership team of SpaceX. A concentrated portfolio of no more than 10-15 selected investment targets will receive up to five M Euros initially with significant dry powder reserved for follow-on rounds.

A Fund Built by Industry Insiders

The Alpine Space Ventures investment team boasts more than 50 years of building products, teams, and companies while shaping up the NewSpace industry. Founding Partner Bulent Altan has been an early leader at SpaceX having joined Elon Musk’s team initially in 2004 and overseeing the avionics development for Falcon 1, Falcon 9, and Dragon capsule and later the development of the initial Starlink satellites before leaving the firm eventually in 2017. Founding Partner Joram Voelklein has been successfully investing in tech since 2015 with a notable angel investment in launch company Isar Aerospace, together with Bulent, that made him one of the earliest backers of the European space tech ecosystem.

This expertise is further supplemented by Alpine Space Ventures’ investor base, made up of many entrepreneurs and pioneers of the space industry — including more than 20 early SpaceX employees.

Additional investors behind the fund include the European Investment Fund (EIF), the NATO Innovation Fund (NIF) and several high-profile family offices.

Concentrated portfolio

The fund that has the goal to invest in an exclusive group of no more than 15 carefully chosen startups providing key space-enabled capabilities has added five companies to its concentrated portfolio so far:

K2 Space

K2 Space, a satellite manufacturer of extremely capable yet cost-efficient mega-class satellites for the era of mass abundance.

Reflex Aerospace, building payload-centric and scalable spacecraft at a fraction of the time historically possible utilizing a highly modular satellite bus.

Morpheus Space, offering electric thrusters and software solutions to bring in-space mobility to satellite operators.

“We are looking forward to putting the fund’s capital to work and continuing to support the industry’s best entrepreneurs”, said Bulent Altan, Founding Partner at Alpine Space Ventures. “First and foremost, we are investing in the best teams with a strong market understanding, who are putting customer-centricity first, and are iterating though technical solutions quickly in their pursuit to build the best possible commercial solution.”

Karan Kunjur CEO and co-founder of portfolio company K2 Space commented, “We are the newest to have joined the Alpine Space Ventures portfolio and yet we have already benefitted from having them behind us beyond their financial commitment. Bulent is a tremendous addition to our board, and we could not be happier to have Alpine Space Ventures on our cap table.”

“Today’s a great day for the ecosystem and beyond as we are making a significant volume of smart money available to scale up space-enabled solutions globally and across industries. We are still in the early days of the European space ecosystem and I could not imagine a better time to inject further momentum into it”, added Joram Voelklein, Founding Partner of Alpine Space Ventures.

“Since day 1, Alpine Space Ventures has convinced us through their depth and industry experience“, added Walter Ballheimer, CEO and co-founder of portfolio company Reflex Aerospace. “Their technical expertise, understanding of market dynamics, and network are beyond anything we have seen so far in the industry.”

The announcement of the closing of the EUR170m early-stage fund comes at a pivotal moment, as Europe establishes a commercial space industry and strengthens its civil and defense infrastructure in reaction to a deteriorating climate and geopolitical environment. The fund’s final closing follows earlier announcements that included a EUR60m landmark investment by the European Investment Fund (EIF) in 2023 and a EUR10m investment by the NATO Innovation Fund earlier this year. (Source: Satnews)

18 Jul 24. Rocket Lab receives up to $23.9m for the CHIPS Act funding in preliminary agreement for semiconductor production for spacecraft and satellites in Albuquerque. Rocket Lab executive leadership, Congressional leaders and state and local officials took part in the event to celebrate the preliminary agreement which would assist in the modernization and expansion project to increase the Company’s compound semiconductor production for spacecraft and satellites, helping to domestically meet the growing national security and consumer demand for these solar cells.

Rocket Lab’s solar cell facility has been a technology hub in Albuquerque for the past 25 years, employing more than 370 employees manufacturing space solar technology that has powered over 1,100 satellites in orbit. To date, Rocket Lab has produced more than four megawatts of solar cell energy — equivalent to powering 14,400 miles driven by an electric car.

The proposed funding will also allow Rocket Lab to bring more than 100 direct manufacturing jobs to Albuquerque in addition to expanding and modernizing its facility. The modernization and expansion project will increase Rocket Lab’s compound semiconductor production by 50% within the next three years powering critical space programs, missile awareness systems, exploratory science missions. To date Rocket Lab’s technology has enabled critical space missions such as the James Webb Space Telescope, NASA’s Artemis lunar explorations, Ingenuity Mars Helicopter, and the Mars Insight Lander, and served as a booming commercial satellite market, including powering the OneWeb broadband internet satellite constellation.

“It is an honor to celebrate Rocket Lab’s proposed CHIPS Act funding at our semiconductor manufacturing facility in New Mexico alongside our esteemed state and national officials,” says Rocket Lab’s Chief Financial Officer, Adam Spice. “This strategic investment will empower Rocket Lab to significantly expand and modernize our operations, bolstering our economic footprint and technological leadership in New Mexico, while adding more than one hundred manufacturing jobs to the U.S. economy in addition to reinforcing our national security.”

“Two years ago, I served on the conference committee of Senate and House members that finalized what eventually became the CHIPS and Science Act. I fought hard to pass the bill because I knew it would have a transformative impact here in New Mexico,” said U.S. Senator Martin Heinrich. “This investment of up to $23.9 m from the CHIPS and Science Act will create 100 new advanced manufacturing jobs in Albuquerque. These new jobs come alongside the clean energy and microelectronics manufacturing boom that we have spurred through both the CHIPS Act and our landmark Inflation Reduction Act. We are making New Mexico one of the best places in America to manufacture advanced technologies — and by doing so, we’re creating hundreds of new, good-paying jobs that New Mexicans can build their families around in their home communities.”

“Thanks to the CHIPS and Science Act, New Mexico is leading the nation in driving innovation and promoting tech advancement. The investment in Rocket Lab in Albuquerque will create new jobs in advanced manufacturing, boost the economy, and help meet the challenges of the future,” said U.S. Senator Ben Ray Luján. “I was proud to welcome this investment alongside the New Mexico Congressional Delegation, the Biden-Harris administration, and Rocket Lab leadership.”

“Thanks to President Biden’s CHIPS and Science Act, Rocket Lab will have 100 new manufacturing jobs in the semiconductor industry,” U.S. Congresswoman Melanie Stansbury said. “This industry is booming, and I’m proud that New Mexico is a leader in science and technology innovation. The expansion of Rocket Lab to New Mexico and modernization of their facility means more economic opportunities for high tech workers and their families in New Mexico.”

“The Economic Development Department is proud to support Rocket Lab’s expansion. In the last 25 years, they’ve been committed to investing in New Mexico and their local community, creating manufacturing jobs, and providing internship and educational opportunities for the next generation of New Mexicans,” Acting Cabinet Secretary for the New Mexico Economic Development Department Mark Roper said.

“Albuquerque continues to be a great home for innovation and advanced manufacturing, and we appreciate President Biden’s investments to help build a thriving, green economy in New Mexico,” said Albuquerque Mayor Tim Keller. “This expansion will bring good-paying jobs to our community and create more diverse career paths for our families.”

“This investment demonstrates that Albuquerque is a prime location for developing cutting-edge technology,” said City of Albuquerque Economic Development Director Max Gruner. “We have state-of-the-art research facilities, educational institutions, and a skilled workforce to support this growth.” (Source: Satnews)

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SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR). For more information visit www.tcibr.com and www.enterprisecontrol.co.uk

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