Why the Pentagon Desperately Needs Defense Contractors to Keep Their Mouths Shuthttp://www.fool.com/investing/general/2014/02/17/why-the-pentagon-desperately-needs-defense-contrac.aspx Rich Smith
February 17, 2014
"Going forward from '14, '15 ... hopefully, we've hit the bottom. If not, I think we're very, very close. ... So I'm, I'll say cautiously optimistic ... to see some growth in the not too distant future."
"The major slide is behind us. ... I think we're getting close to the bottom."
"Overall, we're pleased with the 2014 budget outcomes for our programs."
Dear defense contractors: Will you please shut up? Thanks a lot. -- The Pentagon
To the contrary, for the Pentagon to get the funding it needs to pay its servicemen, buy essential weapons systems, and undertake other tasks for the nation's security, it's going to have to make some tough arguments: That defense spending has been cut drastically already. That belts have been tightened, cost-cuts implemented, defense contractors squeezed. And that it's time to loosen the money spigots again.
But as DefenseNews.com reports in a column this past week, America's defense contractors aren't making the Pentagon's job any easier, what with all the happy-talk they've been spouting lately. Quoting Pentagon acting industrial base chief Elana Broitman, DN notes: "We've gone through a lot of the year-end reports, and a lot of the larger companies in particular are reporting that while they've seen some of their sales take some small hits ... we're really at the nadir of the pressure on their sales, and that things are going to be really rosy from there."
A lone voice, crying in the wilderness
But if Boeing's boss is worried, he's in the minority. Lockheed Martin (NYSE: LMT), General Dynamics (NYSE: GD), Raytheon (NYSE: RTN), and Northrop Grumman (NYSE: NOC) -- if you go through the transcripts of what the CEOs and CFOs at these companies have been telling their investors these past few weeks, it's basically a story of a minor slowdown in revenue leading to a temporary slump in profit. According to most of Boeing's peers, the hard times will soon end, and defense spending will swing up again.<