Cobham Slips 4% on Disappointing Half-Year


LONDON -- Cobham (ISE: COB.L) -- the aerospace and defense systems company -- is currently down 4% following the release of disappointing half-year results.

Revenues were 5% lower at 843 million pounds from 892 million pounds, with a 21% decrease in order intake, which was down to 768 million pounds from 969 million pounds. Underlying pre-tax profits dipped 4% to 142 million pounds, compared to 2011's 149 million pounds.

Underlying earnings per share, however, grew by 9%, underpinned by a share buy-back and lower tax rate. In addition, Cobham increased its interim dividend by 33% to 2.4p per share.

Cobham Chief Executive Bob Murphy said:

We have made progress in the first half delivering organic revenue growth, earnings per share up 9%, and a further step in rebalancing the portfolio towards our commercial markets.

We remain positive on the outlook for our commercial and non U.S. defense/security businesses which now represent 60% of revenue. The outlook for the U.S. defense/security market for the end of 2012 and 2013 is particularly uncertain due to the upcoming U.S. elections and the lack of political consensus on U.S. government budgets.

Given the uncertainties referred to, we are approaching 2013 with caution and building flexibility into the operating model including preparations for appropriate cost management in response to differing U.S. government budgetary outcomes.

The poor results mean that Cobham's share price continues its choppy progress -- up almost 38% from its end-of-2011 low of 167 pence, but down almost 17% on its April 2010 high of 275 pence.

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