Zacks Industry Outlook Highlights: United Technologies Corporation, Oshkosh Corporation, The Boeing Company and Honeywell International Inc.

http://www.zacks.com/
CHICAGO--(Business Wire)--
Zacks.com releases the latest Industry Outlook. Today, Zacks Equity Research
discusses the Aerospace & Defense Industry, including United Technologies
Corporation (NYSE: UTX), Oshkosh Corporation (NYSE: OSK), The Boeing Company
(NYSE: BA) and Honeywell International Inc. (NYSE: HON).

A synopsis of today`s Industry Outlook is presented below. The full article can
be read at http://www.zacks.com/stock/news/26834/Aerospace+%26amp%3B+Defense.

With core defense spending expected to slow, U.S. defense contractors need to
identify additional revenue sources for the coming years. 2009 holds potential
for interesting merger and acquisition (M&A) activity, mostly smaller deals by
larger A&D firms to fill in capability gaps -- particularly in the security,
defense electronics and aftermarket services business areas. U.S. defense firms
may see opportunities in credit-squeezed markets to pick up U.S. assets at
historically low price-to-earnings multiples.

Some large companies are expanding into the adjacent markets of mission support
and services, such as performance-based logistics, or PBL, which can provide a
more consistent -- albeit riskier though perhaps more profitable -- revenue
stream.

Building on the example set by engine manufacturers -- Pratt & Whitney, a United
Technologies Corporation (NYSE: UTX) company, and Rolls-Royce Group -- to get
50% of revenues and 60% of profits from their services business, Aerospace &
Defense contractors are learning how to take on, measure and internalize risk
and to make support and services offerings profitable. This includes
understanding how to service the equipment they manufacture, and assembling the
necessary infrastructure, capabilities and people to operate it.

Shifting defense priorities could prove to be a boon for some manufacturers as
the Pentagon looks to beef up protection for US ground soldiers. Oshkosh
Corporation (NYSE: OSK) is aiming to induct 300 to 500 workers in Wisconsin and
calling back as many as 650 it had let go at a Pennsylvania facility as it looks
to fill orders for armored trucks that can deflect roadside bombs. The truck
manufacturer also won a $1.1 billion contract to build more than 2,200 Mine
Resistant Ambush Protect All Terrain Vehicles for use by US troops in
Afghanistan.

Companies are also leveraging strong balance sheets to grow organically and
acquire new services business. As product development transitions to production
program deliveries, it is anticipated that companies will ramp up their services
businesses and profitability should improve.

Overall, in the next two decades, The Boeing Company (NYSE: BA) forecasts
delivery of 29,400 new commercial aircraft worth $3.2 trillion. Honeywell
International Inc.`s (NYSE: HON) 2008 forecast predicts 17,000 new business
aircraft valued at $300 billion.

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