Deloitte: Global Aerospace and Defense Sluggish

By Rob Starr, Content Manager, Big4.com

A new Deloitte report “2011 Global Aerospace and Defense Industry Performance Wrap-Up,” reveals that reported operating earnings for the global industry decreased 3.1 percent, as did reported operating margins (down 5.3 percent), free cash flow (down 13.3 percent), and reported operating earnings per employee (down 5.2 percent). Despite this decline, the book to bill (BTB) ratio, an indicator of future revenue growth, increased 17.4 percent, primarily as a result of higher sales of new fuel-efficient commercial aircraft, according to the study.

The report also shows that financial performance differences between the commercial and defense segments widened in 2011; commercial revenues grew 10.1 percent while defense revenues declined by 3.3 percent.  Contributing to the commercial revenue growth were record production levels of large commercial aircraft and increases in demand for aircraft services.  The study found that Defense revenues were likely impacted by decreasing defense budgets, competing domestic priorities, weaker than expected economic performance in the western world, and the drawdown of forces in Iraq and Afghanistan.

Deloitte’s Aerospace & Defense Group (A&D) sector focuses on the top issues facing the industry. Deloitte A&D practitioners have deep industry experience and are actively involved in various segments of the industry, including: M&A, advanced technology programs, airplane program launches, and acquisition reform and economic assistance packages. For more information about Deloitte’s Aerospace & Defense group, please visit: www.deloitte.com/us/a&d