Graham Warwick/WASHINGTON DC
Already suffering financial troubles in its defence electronics business, Raytheon has been buffeted by a drop in performance at its aircraft manufacturing unit. Raytheon Aircraft (RAC) shipped 19 fewer aircraft than planned in the fourth quarter, and 10 less than in the same period of 1998.
Elsewhere, Northrop Grumman (above) reported a record year, with net profit doubling to $483 million, on sales up slightly to $9 billion, while General Dynamics and TRW both saw aerospace revenues climb on the back of their purchases of Gulfstream Aerospace and LucasVarity respectively. Textron also saw turnover for the sector boom, fuelled by sales at Gulfstream rival Cessna.
Raytheon's fourth-quarter revenues fell to $4.8 billion, 8% down on 1998, with low deliveries and higher costs at RAC helping depress earnings to $72 million, compared with $341 million the previous year. Difficulties at RAC - plus problems in the electronics and Engineers & Constructors segments - pushed company earnings for the year down to $404million, from $844 million, on revenues up just 2% to $19.8 billion.
"The fourth quarter was clearly a disappointment," admits Raytheon chief executive Dan Burnham. Raytheon expects performance to improve in the second half of this year and points to a strong order intake in the fourth quarter, during which $8.5 billion was added to the backlog, boosting it to $28.4 billion by year-end, up by 18% over the previous year.
RAC president Art Wegner says 11 of the missed deliveries were due to production delays, and eight were customer-related. All will be delivered in the first half.
Northrop Grumman's profits boom was fuelled by payments for remanufacture of Joint Surveillance Target Attack Radar System aircraft for the US Air Force, and the turning around of the UK/US Directed Infra-Red Countermeasures project, offsetting a downturn in Integrated Systems and Aerostructures due to lower civil sales.
General Dynamics' sales jumped 21% to $9 billion and net earnings increased by 22% to $715 million following its purchase of Gulfstream, which posted a 20% increase in revenues to $2.9 billion and a 29% leap in earnings. TRW soared on the LucasVarity acquisition, which pushed net earnings up 20% to $568 million on sales up 43% at $17 billion. Its aerospace and information systems business benefited most from the merger, with segment profit up 23%.
Textron was boosted by a strong performance at Cessna, which helped push income up 41% to $623 million on revenues up 20% to $11.6 billion. Cessna's sales soared above $2.2 billion. At Bell Helicopter, higher revenues on upgrades and military sales were offset by lower commercial sales.
Source: Flight International