Sikorsky Aircraft, participating in the Heli-Expo 2012 in Dallas and the Singapore Airshow, (yes, in Singapore), has been peppering the digital world with announcements of activity.
Sikorsky said it sold four S-76D helicopters to the Japanese Coast Guard for search and rescue missions. Sikorsky retired its S-76C++, early according to some, because the D wasn’t ready. So sales of the 76D are important to getting this family of aircraft back on track.
The company said Air Engiadina, of Switzerland, has also ordered a 76D.
Also, the Stratford helicopter maker, reported the Koreans are buying an S-92 for its coast guard.
The two shows come on the heals of President Obama’s new budget proposal, which appears to be putting into action what analysts have been expecting for more than a year, namely longer lead times on contracts and reductions in orders. But sides are already being drawn up on the budget reductions, and Congress, ultimately has to pass the budget.
Of course, the president ultimately, enforces it and how Obama will do that if he doesn’t get the budget he wants in a vital election year, could be, to say it nicely, interesting to watch.
Under President Obama’s proposed budget, the military would cut about $4.1 billion in aircraft acquisitions during the next fiscal year, but in the news and defense twitterverse, experts are casting doubts that Congress will go along with these cuts in an election year.
Expect the argument to be couched from the right as Obama surrendering America’s military advantages to save a buck, while the White House will say a total defense budget of $613.9 billion for fiscal 2013 ought to be enough to ensure the nation’s security.
In the meantime, Sikorsky Aircraft is presenting at the HeliExpo 2012 and making a slew of announcements regarding new contracts and agreements its landed recently.
The UH-60 Black Hawk standing sentinel at the gate of Sikorsky Aircraft has been missing for years, you just didn’t realize it.
That’s what workers and members of the community have been saying about the newly installed helicopter at the gate of the plant on Main Street. The Black Hawk that sits there was assembled from several used UH-60s and contains elements of a helicopter damaged in battle in Colombia, parts from the Presidential fleet and rotors from the U.S. Army.
It is fitting Sikorsky put the Black Hawk on a pedestal as it not only has saved thousands of lives over its more than 30 years of service, but also saved the helicopter maker itself.
Back in the 1960s, Sikorsky was struggling and even had a year in which it did not have a single military contract. Then, the company won the U.S. Army’s utility helicopter contract with the Black Hawk with the first one delivered in 1979.
Sikorsky President Jeff Pino was a new Army aviator at the time and remembers seeing the first ones arrive at base and said it was the most beautiful machine he had ever seen. And he said when he interviewed with Sikorsky a decade ago, he was surprised there was no standing monument to the Black Hawk and swore if he worked at the plant, there would be one someday.
On Wednesday, Pino dedicated the new Black Hawk display.
Stratford-based Sikorsky Aircraft saw its commercial shipments fall to 12 in the fourth quarter compared to 16 in the same period a year ago, while its sister UTC company Pratt & Whitney experienced an increase from commercial aviation, shipping 154 engines in the fourth quarter of 2011, up from 110 the previous year.
UTC reported earnings for the fourth quarter and year on Wednesday with Sikorsky’s operating profit dipping to $207 million from $239 million. However, Sikorsky took $37 million in restructuring related charges in the quarter. The layoffs, announced last year, are expected to be finalized this quarter and some employees have said they expect to hear this week who will be laid off.
Aerospace companies are hoping commercial aviation, which was dramatically affected by the global economic crash of 2008, is ready to soar in 2012 and 2013, which could help them replace the drop off in revenues from defense, which is expected to hit in the next couple of years.
While Pratt’s numbers show an increase in demand from the commercial markets, Sikorsky showed it is still very much a struggle for helicopters.
However, Sikorsky continued to ship a high number of military aircraft, delivering 61 helicopters in the last quarter of 2011, compared to 60 in the same period in 2010. Overall, Sikorsky shipped 235 military aircraft in 2011 compared to 219 in 2010. Pratt’s military shipments declined for the year to 161 from 180.
Shares in UTC were down 5 cents to $77.73 in New York trading Wednesday before noon.
United Technologies Corp. reported fourth quarter net income attributable to shareholders climbed to $1.3 billion, or $1.47 per diluted share, from $1.2 billion, or $1.31 per diluted share a year ago.
The company said restructuring charges cost 11 cents in the quarter.
Sikorsky accounted for 25 percent of those costs as it cut more than 1000 job. It had $207 million in operating profits for the quarter.
Sikorsky Aircraft’s aftermarket division signed an agreement with Danish Aerotech A/S to discuss the establishment of a support facility and service should Sikorsky win a Roayl Danish Navy contract.
The Danes are expected to announce their decision on the contest this year and Sikorsky Aerospace Services would work with Danish Aerotech to supply replacement parts for the new helicopters.
Sikorsky is a subsidiary of Hartford-based United Technologies Corp. Shares of UTC were up 48 cents to $77.34 in Tuesday trading, just a day before UTC reports fourth space and full-year earnings for 2011.
Initial assesments of the Pentagon’s new military priorities indicate Connecticut companies are in good position to continue to capture defense contracts down the road.
However, the hundreds of billions of dollars in cuts planned could still reduce head counts and overall orders.
The Pentagon and President Barack Obama released the initial strategy for the 21st Century on Thursday. Key elements of the plan call for a focus on Asia and the Middle East with quick strike capabilities in a budget constrained atmosphere.
Sikorsky Aircraft, engine makers Pratt & Whitney and General Electric Co. and submarine maker Electric Boat all appear to be in good position to meet the demands of the new strategy. Sikorsky spokesman Paul Jackson cautioned conclusions would be premature at this point until the details of the plan emerge.
But the initial direction does point to muted, but good news for the helicopter maker, according to Richard Aboulafia, vice president and senior analyst with defense and aerospace consulting firm Teal Group.
“Emphasizing air and sea power at the expense of land power is good for engine companies, although a reduced top line budget really isn’t good news for defense companies,” he said via email. “Cutting land power isn’t bad news for rotorcraft makers because helicopters are needed to do more with less, and because the existing fleet is in terrible shape and needs replacement”
Shares of GE and UTC barely moved in Thursday trading. GE was down 0.05 percent to $18.55 and UTC was off 0.96 percent to $74.33.
Stamford-based Hexcel, a composite materials maker, saw its shares rise 1.39 percent Thursday to close at $24.87.
General Dynamics, the parent company of Electric Boat was off 1.06 percent to $67.40.
