LONDON, March 7 British defence and aerospace
supplier Cobham said it expected to make a return to
modest organic growth in 2014 after cutbacks in the United
States take their toll in 2013.
Cobham, whose products help military vehicles and aircraft
to communicate with one another, said underlying profit before
tax in 2012 was 302 million pounds ($455 million), down from 328
million pounds in 2011, due to restructuring costs and weaker
Group revenue fell 6 percent to 1.7 billion pounds due to
divestments, while core revenue rose 5 percent to 1.7 billion
pounds. Order intake fell 19 percent to 1.7 billion pounds.
Analysts on average expected Cobham to post pretax profit of
259.3 million pounds, against revenue of 1.8 billion pounds,
Thomson I/B/E/S data showed.
"We have delivered a good set of results in market
conditions that continue to be challenging," said Chief
Executive Bob Murphy. "The U.S. defence/security market remains
highly uncertain. In 2013, group operating margins are expected
to be slightly lower than in 2012."
"On the basis of current market trends, we continue to
anticipate a return to modest organic growth from 2014, rising
above mid single digit growth thereafter," he said.
The U.S. defence and security market accounts for 40 percent
of Cobham's revenue. The company said in November it expects
revenue next year to fall by a low-to-mid single digit
About $85 billion in automatic, across-the-board U.S.
government spending cuts for fiscal 2013, also known as
"sequestration", started to take effect on March 1 after
President Barack Obama and Congress failed to agree an
alternative budget deal.
The cuts add to earlier plans made by the U.S., the largest
market for weapons, to slash $487 billion from its defence
budget over the next decade.
Defence contractors BAE Systems, Northrop Grumman
and General Dynamics Corp, which have been hit by
deal cancellations and contract delays amid the political
deadlock, have warned in recent weeks that the tough U.S.
outlook could hit sales and earnings in 2013.
Shares in Cobham closed at 229.2 pence on Wednesday, valuing
the company over 2.5 billion pounds.