Analysis of U.S. Defense Budget
Tuesday, February 9, 2010 at 04:09
The Feb issue of the SPADE Investor newsletter has a good general analysis of the new U.S. defense budget. Overall the budget looks as strong as ever and should be received by the sector as highly positive for increased competition and generally increased spending.- Core defense budget (which excludes overseas CONOPS) will grow around $15B annually for the next 5 years
- 2010 supplemental is $33B and 2011 has $159B for overseas operations
- Time & materials and labor hour contracts will decrease 17% through 2011
- SOCOM gets a 6% increase in spending (plus 2800 new personnel)
- DA will add a 12th active duty brigade (a combat aviation brigade) in 2010 and another in 2015
- M&A firm Houlihan Lokey says the 60 transactions completed in 2009 is likely to rise. 50 of those deals were sub-$100M. A confirmed shift from large "exquisite weapons programs" will surely fuel continued M&A as big firms continue to diversify into growth areas like cyberwarfare, UAV, and overall more technical services.
Much more coverage in the full issue, including mention of Sikorsky developing an unmanned Blackhawk, as well as earnings report coverage of all the majors and more.
DPM | Comments Off |
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