Industry Week in Review – February 10, 2012
This week, Europe’s air safety authority (“EASA”) ordered checks to the entire global fleet of Airbus A380 after cracks were found in some of the planes’ so-called “wing rib feet” – the metal brackets that connect the wing’s ribs to its skin. The order extends a previous order for nearly a third of the planes to be inspected. Airbus has announced that they have developed repair kits for the problem and that, despite the cracks, the aircraft are safe to fly. Still EASA has said that “this condition, if not detected and corrected, could potentially affect the structural integrity of the airplane.” Currently 68 planes are flying with seven airlines. The agency has given airlines between four days to six weeks to complete checks on the A380 aircraft.
Also this week, India selected Dassault Aviation as the preferred bidder for a 126 fighter jet deal. The award was determined largely on the 25% cheaper price tag, compared to the Eurofighter Typhoon jet, which would have cost five billion dollars more than Dassault’s Rafale fighter. In April of last year India pulled a surprise move, cutting out Boeing and Lockheed Martin from the procurement process, as well as Saab AB and Russia’s makers of the MiG-35. Now as the biennial 2012 Singapore Airshow, among the world’s top three aviation events, kicks off February 14th, attention is on the Eurofighter and Boeing. If these planes lose in South Korea and Malaysia, as they have in India and Japan, questions will be raised as to the future of these planes in the international market.
TransDigm Group Incorporated (Up 7.8%) – Shares rose this week after the company raised its FY2012 guidance. Sales are expected to be in the range of $1.47 billion to $1.51 billion, up from $1.43 billion to $1.47 billion. EBITDA is now expected between $723 million to $743 million, compared to $705 million to $725 million previously
Aeroflex Holding Corp. (Down 11.9%) – Shares are down this week after the company posted 2Q2012 sales of $171.1 million compared to $181.6 million the same quarter last year. Additionally, net income fell to $12.6 million or $0.15 per share from $14.3 million or $.19 per share last year.
iRobot Corporation (Down 31.7%) – Shares fell this week after the company announced that it expects to report first quarter earnings per share (“EPS”) between a loss of $0.08 and break-even. Consensus estimates for EPS were $0.30 and $1.45.