	Research Report
Lockheed Martin Description: The aerospace and defense industry was struggling to maintain profitability even before September 11, and fears of further terrorism, the conflicts in Afghanistan and Iraq, and a weak economy combined to devastate the commercial aerospace industry over the next couple of years. More recently, however, the wars in Afghanistan and Iraq have bolstered the coffers of defense companies and commercial aircraft orders reached record levels in 2005. The mother of all defense deals occurred in 2001 when Lockheed beat out Boeing for the $200 billion Joint Strike Fighter contract, the largest defense contract ever. Spread out over almost 30 years, it may be the last major deal for a major manned fighter program, as the success and sophistication of unmanned drones (as evidenced in Afghanistan with the use of General Atomics' Predator) is expected to continue, supplanting the need for the more expensive manned aircraft and making it unnecessary to risk pilots' lives in combat. A desire to be smart, fast, and mobile has replaced the "more and bigger" doctrine of the Cold War. To that end, several companies, including Lockheed Martin, Northrop Grumman, and General Dynamics have invested in hardware and software companies that focus on government customers. The top defense contractors are Lockheed Martin, Boeing, Northrop Grumman, BAE SYSTEMS, Raytheon, General Dynamics, Thales, and EADS. On the commercial side, airlines -- by far the biggest customers in the sector -- have lost billions since 2001. By way of illustration, the top nine airlines lost $10 billion in 2002, almost $6 billion in 2003, and about $4 billion in 2004, and several airlines have filed for bankruptcy protection. As mentioned previously, September 11 and subsequent travel fears dealt a devastating blow to a commercial aircraft market that was already reeling from a market slowdown. That market, which accounts for about 40% of aerospace and defense industry spending, is divided into four segments: large commercial aircraft (planes of 100 seats and more); maintenance, repair, and overhaul (MRO); jet engines; and business and regional aircraft (less than 100 seats). In 2001 Boeing and Airbus, the world's only large commercial aircraft makers, saw orders plummet by 45% and 28%, respectively. Airbus recently surpassed Boeing in orders, but the former's 2002 deliveries dropped 7% from 2001. Boeing meanwhile experienced a staggering 28% decline in deliveries from 2001. As a result of the drastic fall-off in business, Boeing cut about 30,000 jobs or roughly 30% of its commercial aircraft workforce in 2002. Aircraft orders picked up in 2003, 2004, and 2005, however, as Boeing and Airbus duked it out for airline orders; 2005 in particular was a banner year, with Boeing notching a record 1,002 orders just behind Airbus' record of 1,055 orders. Business for Boeing has since begun to make a comeback. Boeing booked more aircraft orders than Airbus in 2006 - the first time since 2000. Boeing booked 1,050 while Airbus only managed 824. Airbus (and parent EADS) have been harmed by production snafus for the A380 which repeatedly have postponed Airbus' targeted delivery dates. The delays have irritated some customers to the point of them firing Airbus in favor of Boeing. Boeing is working on its long-range, fuel-efficient, mid-sized, 787 Dreamliner (due in 2008); Airbus countered with its A380 (due in 2008), a 550-passenger behemoth. Airbus then upped the ante by announcing that it would build the A350 (due in 2010) to compete directly with Boeing's 787. The maintenance, repair, and overhaul (MRO), jet engine, and business and regional aircraft markets have suffered right along with airlines and large commercial aircraft makers. The biggest regional aircraft makers are Bombardier, Gulfstream, and Textron's Cessna unit. GE Aircraft Engines, Rolls-Royce, and Pratt & Whitney, and are the three largest jet engine makers. The space market is made up of two primary segments: satellites and rocket manufacturing and launch services. The major players include Boeing, Lockheed Martin, Northrop Grumman, Alcatel Space, Astrium, Orbital Sciences, and Arianespace. Expectations for the long-term profitability of the space market continue to outstrip the short-term realities, however, leading Boeing and Lockheed to merge their rocket launch services in 2006 as a joint venture, United Launch Alliance. Accenture Description: These experts are making sure technology is a benefit and not a bane. The information technology services industry plays an important role in helping companies manage the information systems so vital to their success. Accounting for about $1.3 trillion in sales, the industry includes companies offering a broad range of business services, including systems integration, data networking, and outsourced technical support services. Firms in this sector often win their assignments through a bidding process; engagements can be for single projects or longer term service contracts. The upper end of the industry includes global services giants that primarily serve multinational companies and government agencies. Technology consulting firms such as Electronic Data Systems, Computer Sciences Corporation, and IBM's world-leading Global Services division offer a full range of systems integration and outsourcing services. The opposite end of the sector is fairly fragmented with local and regional firms serving the needs of small businesses, as well as small firms that target clients in specific industries. Spending on technology services has continued to grow during the past few years following the sharp downturn in the industry around the turn of the century. Companies looking to cut costs through outsourcing have driven some of that growth, as well as an increased demand for better information tools that help manage customer data, supply chain operations, and other business functions. Fears about data and network security have also spurred companies to seek the services of technology consultants. This growth is generally expected to continue, although unexpected shocks to the general economy could still cause short-term dips in business activity.

Research Report

Lockheed Martin

Description:

The aerospace and defense industry was struggling to maintain profitability even before September 11, and fears of further terrorism, the conflicts in Afghanistan and Iraq, and a weak economy combined to devastate the commercial aerospace industry over the next couple of years. More recently, however, the wars in Afghanistan and Iraq have bolstered the coffers of defense companies and commercial aircraft orders reached record levels in 2005. The mother of all defense deals occurred in 2001 when Lockheed beat out Boeing for the $200 billion Joint Strike Fighter contract, the largest defense contract ever. Spread out over almost 30 years, it may be the last major deal for a major manned fighter program, as the success and sophistication of unmanned drones (as evidenced in Afghanistan with the use of General Atomics' Predator) is expected to continue, supplanting the need for the more expensive manned aircraft and making it unnecessary to risk pilots' lives in combat. A desire to be smart, fast, and mobile has replaced the "more and bigger" doctrine of the Cold War. To that end, several companies, including Lockheed Martin, Northrop Grumman, and General Dynamics have invested in hardware and software companies that focus on government customers. The top defense contractors are Lockheed Martin, Boeing, Northrop Grumman, BAE SYSTEMS, Raytheon, General Dynamics, Thales, and EADS. On the commercial side, airlines -- by far the biggest customers in the sector -- have lost billions since 2001. By way of illustration, the top nine airlines lost $10 billion in 2002, almost $6 billion in 2003, and about $4 billion in 2004, and several airlines have filed for bankruptcy protection. As mentioned previously, September 11 and subsequent travel fears dealt a devastating blow to a commercial aircraft market that was already reeling from a market slowdown. That market, which accounts for about 40% of aerospace and defense industry spending, is divided into four segments: large commercial aircraft (planes of 100 seats and more); maintenance, repair, and overhaul (MRO); jet engines; and business and regional aircraft (less than 100 seats). In 2001 Boeing and Airbus, the world's only large commercial aircraft makers, saw orders plummet by 45% and 28%, respectively. Airbus recently surpassed Boeing in orders, but the former's 2002 deliveries dropped 7% from 2001. Boeing meanwhile experienced a staggering 28% decline in deliveries from 2001. As a result of the drastic fall-off in business, Boeing cut about 30,000 jobs or roughly 30% of its commercial aircraft workforce in 2002. Aircraft orders picked up in 2003, 2004, and 2005, however, as Boeing and Airbus duked it out for airline orders; 2005 in particular was a banner year, with Boeing notching a record 1,002 orders just behind Airbus' record of 1,055 orders. Business for Boeing has since begun to make a comeback. Boeing booked more aircraft orders than Airbus in 2006 - the first time since 2000. Boeing booked 1,050 while Airbus only managed 824. Airbus (and parent EADS) have been harmed by production snafus for the A380 which repeatedly have postponed Airbus' targeted delivery dates. The delays have irritated some customers to the point of them firing Airbus in favor of Boeing. Boeing is working on its long-range, fuel-efficient, mid-sized, 787 Dreamliner (due in 2008); Airbus countered with its A380 (due in 2008), a 550-passenger behemoth. Airbus then upped the ante by announcing that it would build the A350 (due in 2010) to compete directly with Boeing's 787. The maintenance, repair, and overhaul (MRO), jet engine, and business and regional aircraft markets have suffered right along with airlines and large commercial aircraft makers. The biggest regional aircraft makers are Bombardier, Gulfstream, and Textron's Cessna unit. GE Aircraft Engines, Rolls-Royce, and Pratt & Whitney, and are the three largest jet engine makers. The space market is made up of two primary segments: satellites and rocket manufacturing and launch services. The major players include Boeing, Lockheed Martin, Northrop Grumman, Alcatel Space, Astrium, Orbital Sciences, and Arianespace. Expectations for the long-term profitability of the space market continue to outstrip the short-term realities, however, leading Boeing and Lockheed to merge their rocket launch services in 2006 as a joint venture, United Launch Alliance.

Accenture

Description:

These experts are making sure technology is a benefit and not a bane. The information technology services industry plays an important role in helping companies manage the information systems so vital to their success. Accounting for about $1.3 trillion in sales, the industry includes companies offering a broad range of business services, including systems integration, data networking, and outsourced technical support services. Firms in this sector often win their assignments through a bidding process; engagements can be for single projects or longer term service contracts. The upper end of the industry includes global services giants that primarily serve multinational companies and government agencies. Technology consulting firms such as Electronic Data Systems, Computer Sciences Corporation, and IBM's world-leading Global Services division offer a full range of systems integration and outsourcing services. The opposite end of the sector is fairly fragmented with local and regional firms serving the needs of small businesses, as well as small firms that target clients in specific industries. Spending on technology services has continued to grow during the past few years following the sharp downturn in the industry around the turn of the century. Companies looking to cut costs through outsourcing have driven some of that growth, as well as an increased demand for better information tools that help manage customer data, supply chain operations, and other business functions. Fears about data and network security have also spurred companies to seek the services of technology consultants. This growth is generally expected to continue, although unexpected shocks to the general economy could still cause short-term dips in business activity.