DoD Tactical Communications received several significant orders to meet ongoing base-business demand and support U.S. Army modernization:
- $38 million from the U.S. Marine Corps for 117G radios with MUOS capability
- $36 million from the U.S. Air Force, including $14 million for 117G radios and $22 million for integrated tactical vehicular radio systems
- 101 HMS Manpack test radios from the U.S. Army as the next milestone in a multi-year modernization
International Tactical Communications received several key orders for large multi-year modernization programs, ongoing counter-terrorism support and combating other evolving threats:
- $260 million from Australia for an integrated tactical network as part of a multi-year modernization
- $52 million from Ukraine for Falcon III® tactical radios and equipment
- $46 million from Kenya for Falcon III® tactical radios
- $39 million from Iraq for integrated tactical vehicular radio systems
Electronic Systems
($ millions) | First Quarter | |||||||||||||
FY 2018 | FY 2017 | Change | ||||||||||||
Revenue | $ | 540 | $ | 537 | 1 | % | ||||||||
Operating income | $ | 109 | $ | 111 | (2 | )% | ||||||||
Operating margin | 20.2 | % | 20.7 | % | (50 | )bps | ||||||||
Segment revenue increased 1% from higher volume in Avionics with growth in several platforms, including the F-35, and the ramp of the UAE battle management system, mostly offset by lower volume from the ADS-B program transition. Operating income declined 2% as strong performance on Electronic Warfare (EW) programs and higher Avionics volume were more than offset by the impact of the ADS-B program transition.
EW received a $133 million, 3-year contract for IDECM systems for U.S. Navy and Australian F/A-18 aircraft and $47 million in additional funding for EW solutions on Moroccan F-16 aircraft as customers upgrade legacy platforms to combat emerging threats.
Avionics received a $63 million order for LRIP 10 release systems on the F-35 program, as well as orders of $26 million from Singapore and $20 million from Turkey for F-16 smart release rack systems as international customers continue to modernize platforms.
C4ISR / Battle Management Systems received a contract worth up to £55 million from the United Kingdom for T7TM robots in support of explosive ordnance disposal missions, a new franchise for this business.
Space and Intelligence Systems
($ millions) | First Quarter | |||||||||||||
FY 2018 | FY 2017 | Change | ||||||||||||
Revenue | $ | 466 | $ | 453 | 3 | % | ||||||||
Operating income | $ | 87 | $ | 79 | 10 | % | ||||||||
Operating margin | 18.7 | % | 17.4 | % | 130 | bps | ||||||||
Segment revenue increased 3% from higher Classified revenue, driven by space superiority programs, partially offset by lower revenue on environmental programs. Operating income increased 10% driven by higher volume, strong program performance and incremental pension income.
In Classified programs, order momentum remained strong, particularly in space superiority. In addition, investments in innovative ground processing capabilities and small satellite technology resulted in two key wins in the quarter
— a follow-on contract to a ground-based adjacency initially awarded in fiscal 2017, and a new award with the potential to grow to $100 million over the next two years.