* Sees 2013 group revenues down low-to-mid single digit
* US defence/security sales seen down mid/high single digit
* Shares down 7.5 pct
(Adds company, analyst comment, shares, additional detail)
By Rhys Jones
LONDON, Nov 12 British aerospace and defence
supplier Cobham forecast a fall in revenues next year,
blaming cuts to the U.S. military budget and sending its shares
to an eight-month low.
Cobham, whose equipment aids communication between military
vehicles and aircraft, said on Monday it expected revenue next
year to decline by a low-to-mid single digit percentage because
of the "fiscal pressure the U.S. faces ... and a lack of
political consensus on U.S. government budgets".
The U.S. defence and security market accounts for around 40
percent of Cobham's revenue.
Defence firms around the world have seen contract awards
delayed and some existing deals cancelled as politicians in the
United States, the world's biggest spender on military
equipment, argue over how to cut the country's deficit.
Military contractors including Britain's BAE Systems
and U.S. firms Northrop Grumman Corp and
General Dynamics Corp have reported lower earnings amid
The United States, by far the largest market for weapons,
already has plans in place to cut $487 billion from its defence
budget over the next decade, while Congress could make a further
$500 billion in military spending cuts in January under a
process of automatic reductions known as sequestration.
"Regardless of whether sequestration occurs ... U.S. defence
and security revenue will decline in 2013 by mid-to-high single
digits," Cobham's chief executive Bob Murphy said.
Cobham shares were down 7.5 percent at 195.25 pence by 1030
GMT, their lowest level since March, valuing the group at just
over 2 billion pounds.
RBC analyst Rob Stallard expects to downgrade his forecast
for Cobham's 2013 sales by 5 to 8 percent but predicts it will
deliver modest growth from 2014.
Prior to Monday's announcement, Cobham was expected to
report 2013 revenues of around 1.79 billion pounds ($2.9
billion), according to a Thomson Reuters I/B/E/S poll of 17
In response to the U.S. slowdown, Cobham plans to extend its
restructuring programme for a further two years, until end-2015.
It will invest an extra 60 million pounds in the scheme in the
hope of saving around 30 million pounds per year on completion.
Cobham said its organic revenue growth, which excludes
acquisitions, in the ten months to October 2012 had been broadly
flat and expects this to continue for the remainder of 2012. It
predicts 2012 earnings per share similar to the prior year.
($1 = 0.6286 British pounds)
(Editing by Kate Holton and Mark Potter)