Author: Jane Edwards|| Date Published: December 5, 2022
A new McAleese & Associates report shows defense prime contractors recorded a 3 percent increase in sales during the third quarter of 2022 and sector operating margin of 11 percent.
McAleese said most defense primes reported significantly higher free cash flow during the third quarter and reaffirmed their earnings per share guidance for full-year 2022.
According to the report, defense companies have been facing geographic labor shortages and expect schedule delays due to defense electronics supply chain disruption to continue into next year, which McAleese said could slow sales growth.
McAleese noted that contractors are seeing Q3 cost growth of 1 percent due to 7.7 percent inflation rate and labor shortage and initiating cost-cutting efforts, automation and other capital expenditure factory productivity improvements to help reduce direct labor costs.
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