This week President Obama released the Budget for Fiscal Year 2013. In it the Department of Defense has requested a total of $613.9 billion – $525.4 billion for base discretionary spending and $88.5 billion for Overseas Contingency Operation (“OCO”) spending. In all, the Pentagon’s 2013 budget outlines the elimination of $259 billion over the next five years, which is in line with the Budget Control Act of 2011’s requirement of $487 billion in defense cuts over the next decade.
According to the budget proposal, the Pentagon has stated that $75 billion will be saved over the next five years by reorganizing its investment strategy. A large portion of these cuts, $15.1 billion, will come from reorganizing the Joint Strike Fighter program, with another $13.1 billion from reducing the Navy’s shipbuilding plans. Overall the Pentagon has requested $179 billion in 2013 to buy and develop aircraft, ships, vehicles, missiles, and satellites.
Specifically, the 2013 budget requests breakdown for military services are:
- $136.6 billion for the Army – about $700 million more than appropriated in 2012
- $155.9 billion for the Navy – about $900 million less than appropriated in 2012
- $140.1 billion for the Air Force – about $4.8 billion less than appropriated in 2012
- $94.9 billion for defense-wide issues – about that same as was appropriated in 2012
Finmeccanica SpA (Up 17.7%) – Shares are up this week amid investor speculation that euro-area officials are nearing an agreement on a Greek bailout deal, as well as the announcement that the company’s subsidiary Telespazio signed contracts worth about €112 million ($147 million). All of the contracts signed support various space operations.
Mine Safety Appliances Co. (Up 6.1%) – Shares rose this week after the company announced record net sales in the fourth quarter and full year. MSA earned $0.46 a share on net sales of $303.7 million, compared to $0.32 a share on $285 million a year ago.
Ceradyne, Inc. (Down 4.3%) – Shares declined this week after the company reported 4Q2011 earnings per share of $0.56, $0.05 below analysts’ estimates of $0.61. Revenue for the quarter also came in below estimates at $128.5 million, versus the consensus of $131.9 million.