Industry Week in Review – March 15, 2013
Over the past week, the Federal Aviation Administration (“FAA”) gave initial approval to Boeing’s proposed plan to fix lithium-ion battery issues on its 787 Dreamliner. The approval is a positive milestone for Boeing, which has defended the company’s 787 aircraft for nearly two months following its grounding. Boeing believes that testing of the redesigned lithium-ion batteries should be completed within a week or two. Despite the redesign, Chief Project Engineer for the 787, Mike Sinnett, claimed Boeing may “never get to the single root cause [of the battery issues].” Sinnett noted the company’s engineers spent over 200,000 hours studying the battery failures and developed solutions for all 80 possible problems they found. Battery approvals must come from both the FAA and the Japanese equivalent agency, the Civil Aviation Bureau, since Japan is Boeing’s biggest customer for the aircraft.
Big Movers
Engility Holdings, Inc. (Up 24.9%) – Shares were up this week after the company announced fourth quarter and full-year 2012 results ahead of analyst expectations. For the fourth quarter, the company reported earnings per share of $0.77, beating consensus estimates by $0.13.
Lakeland Industries Inc. (Down 19.7%) – Shares were down this week after the company announced lower-than-expected sales in Brazil for the quarter ended January 31, 2013 which may result in an operating loss. The company also said it recorded an impairment charge at its Brazil subsidiary and warned of potential default on its line of credit.
Relevant Transactions
ORBOCOMM to acquire the GlobalTrak division from System Planning Corporation, a provider of real-time situational awareness and intelligence that utilizes satellite and cellular communications networks. The acquisition expands ORBCOMM’s asset monitoring capabilities as well as its solutions for the transportation market. Terms of the deal were not disclosed.
