AVIATION WEEK Top Performing Companies Award Winners
Lockheed Martin Corp.
Annual Sales $41.9 billion
Rank 1st (Revenue greater than $5 billion)
Average Five-Year Score Improvement 8th (up 8.6%)
Proof that big doesn't always mean slow and inefficient, Lockheed Martin posted high scores in all four TPC metrics, pushing it to the top of this year's rankings. A beneficiary of robust Pentagon spending, the company has consistently improved its earnings by attacking costs, improving its supply chain, and implementing common systems across a group of previously far-flung units. Acquisitions in adjacent markets such as port security are diversifying its portfolio.
Rockwell Collins, Inc.
Annual Sales $4.4 billion
Rank 1st (Revenue between $1-5 billion)
Average Five-Year Score Improvement 13th (up 5%)
The model for how aerospace companies should be run, this avionics supplier has achieved continuous improvement year after year. Focused and innovative, the company has consistently grown earnings faster than revenue, in part by developing specialized products that yield high profit margins. It has avoided pricey acquisitions and made sizable stock repurchases that bolstered enterprise value. The reason Rockwell Collins doesn't rank higher in five-year improvement is that it can't climb much farther.
Ceradyne, Inc.
Annual sales: $757 million
Rank: 1st (Revenue between $250 million-$1 billion)
Average Five-Year Score Improvement: 8th (up 13%)
TAn exceptional performance in return on invested capital propelled Ceradyne to the top spot of companies with revenue between $250 million and $1 billion. The big question, however, is whether the supplier of ceramics used in body armor can maintain its momentum when U.S. war operations in Iraq begin to wind down. One troubling sign: Ceradyne’s scores in earnings momentum have started to weaken significantly.
AeroVironment, Inc.
Annual sales: $174 million
Rank: 1st (Revenue less than $250 million)
Average Five-Year Score Improvement: n.a.
This innovative producer of small unmanned aerial vehicles just went public in 2007, but its total score puts it in the top ranks among all A&D companies in the TPC study. AeroVironment scores exceptionally well in return on invested capital and financial health. Revenue growth has exceeded 25% during the past two years. The challenge, however, will be to maintain strong gross margins and build on asset turn rates that are only average for its peer group.
