Industry Week in Review – July 29, 2011
The White House and Congress continued to debate over a deal raising the U.S. federal borrowing limit. The House postponed Speaker Boehner’s plan to increase the debt ceiling after he was unable to quell significant opposition from certain GOP leaders. With it unclear whether the vote would be rescheduled, Senators Harry Reid and Mitch McConnell’s incremental raise plan has emerged as a more viable alternative to avoid default. President Obama has indicated that he would accept a two-part plan to raise the $14.3 trillion debt ceiling, with the second part including tax reform and changes to the entitlement programs Medicare, Medicaid, and Social Security. Obama also said the first step should be substantial enough to extend the debt ceiling beyond the 2012 election.
Notes on some big movers:
Finmeccanica, SpA (Down 27.9%) – Shares fell for the week as the Company released 1H 2011 results below expectations and lowered 2011 revenue forecasts by €1 billion. Reported revenue fell 3% to €8.4 billion and adjusted EBITDA fell 25% to €440 million.
Unisys, Inc. (Down 20.8%) – Shares fell for the week as the Company reported 2Q 2011 net loss of $11.6 million, or $0.27 per diluted share. Additionally, gross profit for this quarter was 22.8%, down from 27.8% in the same quarter in 2010.
Oshkosh Corporation (Down 17.5%) – Shares fell for the week as the Company reported 2Q 2011 earnings of $68.4 million ($0.75 cents per share) compared to last year same quarter earnings of $211.2 million ($2.31 per share). The company attributes the fall in price to pending U.S. defense spending cuts.
Notes on some relevant transactions:
KeyW to acquire Flight Landata, Inc., a provider of agile airborne ISR solutions and Micro Terrain Intelligence to the DoD and the Warfighter, for $30 million in cash. The transaction, which is expected to close in early August, expands KeyW’s cyber superiority platform to encompass geospatial and imagery intelligence.
Airbus to acquire Metron Aviation, a provider of advanced Air Traffic Management (ATM) products and services for the global aviation industry. The terms of the deal, which is expected to close later this year, were not disclosed. This acquisition strengthens Airbus’s strategy to accelerate and support ATM programs that will improve global air transportation capacity, efficiency and environmental sustainability.
CACI International to acquire Paradigm Holdings Inc., a provider of cybersecurity and enterprise IT solutions federal civilian agencies, DoD, and the IC for an undisclosed amount. The acquisition, which is expected to close in Fall 2011, expands CACI’s cybersecurity capabilities and bolsters its strong presence in supporting national security missions.