UPDATE 1-Cobham cautious on U.S. defence market as profit slips

Wed Aug 8, 2012 2:36am EDT

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LONDON Aug 8 (Reuters) - British aero electronics group Cobham said adjusted pretax profit slipped 4 percent in the first half, as expected by the market, and said it would target commercial aircraft markets in light of uncertainty about U.S. defence spending.

Cobham, whose equipment aids communication between military vehicles and aircraft, on Wednesday reported an underlying pretax profit of 142 million pounds ($222.2 million) for the six months to the end of June on 5 percent lower revenues of 843 million pounds.

The company, which earlier this year acquired Danish communications equipment maker Thrane & Thrane, said it remained positive on the outlook for its commercial and non U.S. defence and security businesses, which now represented 60 percent of revenue, but it was less positive on U.S. defence spending.

"The outlook for the U.S. defence/security market for the end of 2012 and 2013 is particularly uncertain due to the upcoming US elections and the lack of political consensus on U.S. Government budgets," the company said.

"Given the uncertainties referred to we are approaching 2013 with caution and building flexibility into the operating model including preparations for appropriate cost management in response to differing US Government budgetary outcomes."

Cobham was expected to report an average first-half pretax profit of 140 million pounds, according to Thomson Reuters I/B/E/S data.

Suppliers to the civil aerospace sector have been boosted by order book growth at planemakers Airbus and Boeing , who expect combined deliveries for 2012 to be well ahead of last year.

The world's top two planemakers are ramping up output and are targeting more than 1,100 deliveries this year, in response to growing demand from airlines for new fuel-efficient planes.

Cobham increased its interim dividend up 33 percent to 2.4 pence per share.

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