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Category Archives: Aerospace

3 Aerospace and Defense ETFs to Buy on Solid Industry Oulook – ETF News And Commentary

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Though Q1 earnings season has seen a comparatively weak start, the aerospace and defense space has come out with a series of estimate beating results.

The world's largest aerospace and defense manufacturers Boeing, Lockheed Martin and Northrop have all cheered the market by reporting higher-than-expected profits and raising their full year forecasts. Cost cutting strategies and operational efficiency enabled these biggies to keep their bottom-line growing (read: Top Ranked Defense Stocks and ETFs Ready to Explode Higher ).

Premier defense operators are expanding their operations through acquisitions and foreign orders to combat defense budget cuts in the U.S. These companies are also restructuring their businesses and keeping themselves abreast of technology to counter fresh competition.

Below we have highlighted in greater details the earnings of some of the aerospace and defense companies.

Earnings in Focus

Aerospace giant, The Boeing Comapny ( BA ) reported adjusted first quarter 2014 earnings of $1.76 per share, beating the Zacks Consensus Estimate by 15.4%. Revenues from the company's Commercial Airplane Segment surged 19% to $12.7 billion on higher delivery volume. Strong top-line growth and increased deliveries of its flagship commercial airframes, the 737, 777 and the 787, were the primary contributors for the strong results.

Also, Northrop Grumman Corp ( NOC ), which makes unmanned planes, the B-2 bomber and electronic equipment, also reported higher-than-expected earnings and revenues. While the company's adjusted earnings of $2.40 per share surpassed the Zacks Consensus Estimate of $2.15 by 11.6%, revenues beat our forecast of $5,809 million by 0.7%.

However, the company reported a 4.2% year-over-year drop in its quarterly revenues. Lower volume from unmanned and space programs as well as from combat avionics and navigation and maritime systems programs were some of the reasons behind the sales decline (see Aerospace and Defense ETF Investing 101 ).

Pentagon's prime contractor, Lockheed ( LMT ) also came up with bright results amid the uncertain budget environment. Though the company missed our revenue estimate of $10,834 million by a small 1.7% margin, it reported quarterly earnings of $2.87 per share, beating our estimates by a margin of roughly 14%. Moreover, the company reported a 27.6% jump in earnings from the year-ago quarter.

Also, United Technologies Corp. ( UTX ) reported better-than-expected results beating our estimates on both earnings and revenues. Though the company's profits fell 5% year over year, an improved 2014 guidance helped cheer investors. Sales in 2014 are expected to be $64 billion. The company increased the low end of its earnings guidance from $6.55-$6.85 per share to $6.65 to $6.85 per share.

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3 Aerospace and Defense ETFs to Buy on Solid Industry Oulook - ETF News And Commentary

New All-electric Tube Bender Extends Shape-forming Capabilities of Aerospace Manufacture

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Madera, CA, Theaerospace tubular parts manufacturer SL Engineering is continuing its investment in advanced automation with the acquisition of a second all-electric CNC tube bending machine from Unison.

The new machine enhances SL Engineering's manufacturing capabilities, especially its ability to produce more complex tubular shapes. It also extends the size range of tubing that can be bent using all-electric servomotor-controlled movement - to tube and pipe diameters up to 80 mm.

"Engine and aircraft manufacturers are taking advantage of the advanced shape forming capability of state-of-the-art tube bending machines by specifying more complex shapes and highly challenging tighter-radius bends - to save weight and space and eliminate welded joints," says Shaun Stevenson of SL Engineering. "The sophisticated bending capability of Unison machines, which allow greater control over tube clamp and carriage push forces, helps us to achieve these new levels of precision. If we did the same jobs on our old hydraulic machines we would be much more reliant on highly skilled operators to both set up the machines, and make the parts with additional weld joints, and hence additional cost."

SL Engineering (SLE) is one of Europe's leading Tier 1 suppliers of rigid tube assemblies and precision machined parts for aerospace applications, and supplies components to major engine and airframe programs from commercial Airbus and Boeing aircraft to leading military programs such as the Joint Strike Fighter (JSF). Although the aerospace sector accounts for a large proportion of turnover, SLE also provides parts for industrial gas turbines, marine propulsion, and other critical industry applications.

SLE's business today is characterised by a need for manufacturing flexibility. The average batch is around 5 to 25 parts, and orders can even be for just a single emergency 'aircraft-on-ground' part. Demand for greater precision and shape complexity is another major facet of its work. Until recently, few tubular parts required bends with radii of less than 2D (twice the tube diameter). Today, however SLE regularly receives requests for bends of 1D, and for shapes with minimal straight sections between bends. The use of thinner walled tubing, and expensive specialist materials such as titanium and Inconel are further trends.

These demands are behind the company's moves to all-electric tube bending technology. SLE installed its first such bending machine in 2010 - a 30 mm diameter Breeze from the UK manufacturer Unison. Much of SLE's work is on diameters of 30 mm or less, and most of its current work falls into the sub-50.8 mm range. The first all-electric machine has proved critical for SLE, allowing it to handle small batch set-ups much more efficiently and quickly - with zero or minimal scrap. As a result, the company channels most new work for smaller parts onto the 30mm all-electric machine, and transfers many older parts onto the machine by creating new bending programs as orders come in. After almost four years of operation, the 30 mm machine now produces a significant proportion of SLE's business. SLE typically has anywhere from 500 to 1,000 live jobs at any one time.

The latest machine that SLE has acquired, a Unison Breeze 80, now gives the company all-electric CNC tube bending options for tube diameters up to 80 mm. The machine also incorporates a multistack/multiradius tooling capability. This feature is a critical aspect of achieving some of the complex tubular part shapes and multiple bend sequences that are being specified on today's aerospace programs.

"We continue to see many challenging opportunities in the sector, but it does require significant capital investment," adds Stevenson. "The new Unison bender, along with further investments in 5-axis machining, has helped SLE take its manufacturing capability to a new level. We can meet the most complex tube assembly specifications that aerospace companies require today, and the combination of advanced machinery and our know-how gives us a platform to raise the bar even higher, and differentiate SLE from our competitors. Another service we offer to clients who are able to provide us with pre-release drawings, is evaluating manufacturability and advising on the potential for manufacturing and cost saving improvements before final drawing release."

As an example of the exacting specifications that SLE faces, one current part for a military fighter program calls for a shape with multiple 2D bends but minimal straight sections between bends, using thin wall titanium tubing. Tube ovality also has to be less than 5% after bending - as compared with an industry norm of 10% - and the part shape has a positional and length tolerance of just +/- 0.005 inches after bending and welding. As the part is made from titanium, bending must be right first time as adjustments after shape forming are almost impossible. The consistency and repeatability of the Unison machine is a critical enabler for fabricating this part, as well as other titanium tube parts that SLE currently makes.

Another aspect of the advantages of the Unison machine for a contractor such as SLE is the ease of programming. Tubes are often the last parts to be defined and designed - whether they are for an engine or airframe. Using its own bespoke macro-driven CATIA V5 closed-loop CAD/CAM facility, and Unison's three-dimensional simulator, SLE can create new CNC bending programs for the Unison machine very rapidly - providing ideal support for clients that are unable to supply tube/pipe details until the very late stages of projects.

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New All-electric Tube Bender Extends Shape-forming Capabilities of Aerospace Manufacture

Aerospace firms boost payrolls; defense slips

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Southern Arizonas major aerospace employers are among the technology-based companies that staged a resurgence in 2013, as several firms serving commercial aviation markets boosted their payrolls.

Meanwhile, aerospace-oriented defense firms like Raytheon Missile Systems shed some jobs in 2013, while military employers like Davis-Monthan Air Force Base saw cuts mainly in civilian workers due to sequestration and Pentagon budget-cutting efforts.

Bombardier Aerospace, the areas biggest aviation employer, added more than 100 jobs last year as it opened three new maintenance lines for its Q400 and Q400 NextGen turboprops to support new long-term maintenance contracts with North American carriers.

Another local aerospace firm that made big strides in 2013 was B/E Aerospace, a maker of luxury interiors for the corporate and private jet markets. The company has nearly doubled its staff since 2011 as the global market for cabin interiors has begun recovering from the recession and its lingering aftermath.

Some smaller aerospace companies are growing as well.

Prized for its relatively high wages and high-value exports, the technology-driven aerospace sector is the focus of economic and workforce development in the region.

Aerospace is a mainstay of Pima Countys manufacturing sector, accounting for nearly half of the 23,200 manufacturing jobs in the county in 2013, according to the Arizona Department of Administration and U.S. Bureau of Labor Statistics.

But overall, employment in aerospace products and parts manufacturing in Pima County fell from 11,200 jobs in January 2013 to 10,900 in January 2014, a drop of about 2.6 percent.

Aerospace and defense are a major focus for Tucsons economic-development group, Tucson Regional Economic Opportunites Inc. (TREO), along with solar energy, biosciences and logistics.

At a meeting of the Pima County Workforce Investment Board, TREOs David Welsh compared the aerospace and defense sector to the sun in a model solar system.

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Aerospace firms boost payrolls; defense slips


  1. Aerospace