NEW YORK, April 16 (UPI) -- Consulting firm Deloitte LLP reports that revenue for the U.S. aerospace and defense sector dipped 1.5 percent in 2012 while commercial aerospace increased.
The increase in revenue for the commercial sector was 18.3 percent, Deloitte said in an industry analysis.
Earnings last year for the defense sector fell 7.4 percent and increased 13.2 percent in the commercial sector.
Deloitte said its analysis is based on the financial performance of 20 major U.S. aerospace and defense companies. The information came from company filings, company media releases of fiscal year-end, unaudited financial performance.
In assessing the possible impact of $46 billion in annual defense budget cuts under "sequestration" that took effect this year, the company said that -- assuming the cuts are proportional and the entire amount remains in subsequent congressional actions – as much as another "12 percent, or $25 billion, of defense and government contractor budgets are likely to be impacted for a combined total of approximately 24 percent in reductions."
"With U.S. defense budgets being cut, defense contractors are likely to experience continued revenue declines, and in some cases accelerated revenue declines," said Tom Captain, vice chairman, Deloitte LLP and aerospace and defense sector leader.
"It's expected that U.S. defense contractors will aggressively address this revenue shortfall with foreign military sales, acquisitions, new product introductions and growth in adjacent markets."
The Deloitte analysis states that overall revenues of the top 20 U.S. aerospace and defense companies rose 5.5 percent to $354.7 billion, "primarily driven by record-setting commercial aircraft production," which offset revenue decline within the defense subsector.
Overall operating earnings fell 2.2 percent to $36 billion.