I found 14 Big US Defense Contractor Corps with Pretax Earnings above $100 mil each in either the 2Q 2011 or in the 2Q 2010. Not all of the sales of these 14 Big US Defense Contractors are made to the US Government, but a substantial portion of them are.
These 14 Big US Defense Contractors registered a Total Pretax Earnings increase of 16% in annual 2010. Then in the 1Q 2011, this earnings growth decelerated nicely to 5%.
So what happened in the most recent 2Q 2011? Well, this earnings growth re-accelerated, precisely matching the 16% growth in annual 2010.
Below here are these 2Q 2011 Pretax Earnings (PTI), along with a comparison with the prior year’s quarter amounts.
...........................................................................Increase
................................................PTI........PTI.......(Decrease)
.................................................2Q.........2Q..................
...............................................2011......2010....Amount....%
.................................................(millions of dollars)
United Technologies......CT.....2,079.....1,733.......346....20%
Boeing...........................NY.....1,425.....1,210........215....18%
Honeywell.....................NJ.....1,100.......767........333....43%
General Dynamics..........VA.......959.......945..........14.......1%
Lockheed Martin............MD.......909....1,010.......(101)..-10%
Northrop Grumman........CA.......788......675.........113....17%
Raytheon........................MA......641.......310.........331...107%
Precision Castparts.........OR.......419.......349..........70....20%
L-3 Communications......NY.......353.......365.........(12)....-3%
Goodrich........................NC.......265.......238..........27....11%
ITT.................................NY.......248......305.........(57)..-19%
Rockwell Collins..............IA.......227......204..........23....11%
Textron...........................RI.......135........99..........36....36%
Alliant Techsystems........MN.....104.......115.........(11)..-10%
Total all 14..............................9,652...8,325.....1,327....16%
I think it would be helpful to track the history of the Core Pretax Income of these 14 Big US Defense Contractor Corps.
In the first full year of the Bush/Cheney Presidency, in 2001, the Total Core Pretax Income of these 14 Big US Defense Contractor Corps was $10.8 bil.
By the end of the first term of the Bush/Cheney Presidency in 2004, this Total Core Pretax Income of these 14 Big US Defense Contractor Corps had increased dramatically to $16.0 bil, or up by a massive 47% in only 3 years.
This incredible profligate US Defense spending spree continued in the second term on the Bush/Cheney Presidency, with the Total Core Pretax Income of these 14 Big US Defense Contractor Corps growing monstrously to $35.8 bil in 2008, or by an incredible 124% in only 4 years.
Thus, when you focus on the last 7 years of the Bush/Cheney Presidency, the Total Core Pretax Income of these 14 Big US Defense Contractors grew from $10.8 bil in 2001 to $35.8 bil in 2008, or up an off-the-charts 230% in that 7 year period.
And we wonder how the US Deficit is so high now?
Clearly, there are wise steps we can take to reduce US Defense Contractor spending.
There is no way these 14 Big US Defense Contractors should be making the level of profits they are making, especially when the US Deficit is so huge.
I think one initiative that could help here is to substantially kill the Cost Plus Contracts the US Government enters into with Big US Defense Contractor Corps. It is just not right for these companies to be making such windfall profits, and particularly to do it when they don't have downside risk, since their losses are substantially protected by Cost Plus Government Contracts.
So how have these 14 Big US Defense Contractor Corps done since the Obama/Biden have taken over the reins?
Well, the Total Pretax Income of these 14 Big US Defense Contractor Corps has declined from $35.8 bil in 2008 to $32.9 bil in 2010, or down by 8%.
Much more needs to be done, but at least the Obama/Biden Administration has turned back somewhat the skyrocketing profits of the previous 7 years of these Big US Defense Contractor Corps.
