By Andrea Shalal-Esa
PARIS, June 15, June 15 (Reuters) - Alliant Techsystems Inc on Monday said its focus on building lower-cost weapons that can be rapidly fielded is paying off with the U.S. military at a time when big-ticket programs with long development cycles are under mounting budget pressure.
ATK, which boosted revenues by 10 percent to $4.6 billion in the 2009 fiscal year ended March 31, is a smaller defense company whose stock surged to over $90 last week from $60 in late March.
It raised its fiscal 2010 sales guidance in May to a range of $4.73 billion to $4.80 billion, up from previous expectations of $4.55 billion to $4.65 billion.
'We continue to surprise ourselves,' he said in an interview at the Paris Air Show.
ATK Chief Executive Dan Murphy told Reuters he was focused on using current technologies to add capabilities to current weapons and develop new ones that would get into the hands of soldiers in months, not years.
Murphy said has been telling investors since 2004 that U.S. defense spending would shift to extending the life and expanding the capabilities of existing weapons, contracts that ATK has aggressively pursued.
ATK's approach dovetails with that of Defense Secretary Robert Gates, who is pushing for a series of cuts to defense programs and wants the Pentagon to focus more on fighting today's wars than buying high-end weapons for some future fight.
ATK makes composite structures for military and commercial aircraft, including the Airbus A350, aircraft missile warning systems, commercial ammunition sales, precision weapons technology and solid rocket propulsion systems.
The company survived a series of defense cuts announced by Gates in April, although it did have a role in the Kinetic Energy Interceptor run by Northrop Grumman Corp's, a missile defense program once valued at $6.3 billion, which was cancelled by the Pentagon in May.
Murphy said he supported Gates' cuts and commended his drive to eliminate programs that were not performing well, but he said the KEI program termination surprised him.
'That's where I'd say maybe we're pulling the trigger a little too hastily,' Murphy said, adding, 'If we don't allow for some course corrections, we're never going to develop anything new.'
Program execution was an important factor underpinning the company's success, Murphy said, citing the company's on-time, on-cost development of the Advanced Anti-Radiation Guided Missile program.
ATK, the world's largest small-caliber ammunition maker, was struggling to meet stronger-than-expected commercial demand for cartridges despite recent capacity expansions.
Expecting falling demand, the company initially forecast growth for the sector of just 7 percent in fiscal 2010, which began on April 1, after 18 percent growth in fiscal 2009, but first-quarter results indicated ATK would beat that forecast, Murphy said. He did not specify a new target.
ATK shares closed nearly 3 percent lower at $88.11 on Monday.
Rob Stallard, analyst with Macquarie Securities, recently downgraded the stock to neutral from outperform, saying it was well-placed to report better earnings growth than its peers, but would likely lag recovering cyclical companies.
(Reporting by Andrea Shalal-Esa, editing by Leslie Gevirtz) Keywords: AIRSHOW ATK/ (paris.equities@reuters.com; +33 1 4949 5452; Reuters Messaging: tim.hepher.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
PARIS, June 15, June 15 (Reuters) - Alliant Techsystems Inc on Monday said its focus on building lower-cost weapons that can be rapidly fielded is paying off with the U.S. military at a time when big-ticket programs with long development cycles are under mounting budget pressure.
ATK, which boosted revenues by 10 percent to $4.6 billion in the 2009 fiscal year ended March 31, is a smaller defense company whose stock surged to over $90 last week from $60 in late March.
It raised its fiscal 2010 sales guidance in May to a range of $4.73 billion to $4.80 billion, up from previous expectations of $4.55 billion to $4.65 billion.
'We continue to surprise ourselves,' he said in an interview at the Paris Air Show.
ATK Chief Executive Dan Murphy told Reuters he was focused on using current technologies to add capabilities to current weapons and develop new ones that would get into the hands of soldiers in months, not years.
Murphy said has been telling investors since 2004 that U.S. defense spending would shift to extending the life and expanding the capabilities of existing weapons, contracts that ATK has aggressively pursued.
ATK's approach dovetails with that of Defense Secretary Robert Gates, who is pushing for a series of cuts to defense programs and wants the Pentagon to focus more on fighting today's wars than buying high-end weapons for some future fight.
ATK makes composite structures for military and commercial aircraft, including the Airbus A350, aircraft missile warning systems, commercial ammunition sales, precision weapons technology and solid rocket propulsion systems.
The company survived a series of defense cuts announced by Gates in April, although it did have a role in the Kinetic Energy Interceptor run by Northrop Grumman Corp's, a missile defense program once valued at $6.3 billion, which was cancelled by the Pentagon in May.
Murphy said he supported Gates' cuts and commended his drive to eliminate programs that were not performing well, but he said the KEI program termination surprised him.
'That's where I'd say maybe we're pulling the trigger a little too hastily,' Murphy said, adding, 'If we don't allow for some course corrections, we're never going to develop anything new.'
Program execution was an important factor underpinning the company's success, Murphy said, citing the company's on-time, on-cost development of the Advanced Anti-Radiation Guided Missile program.
ATK, the world's largest small-caliber ammunition maker, was struggling to meet stronger-than-expected commercial demand for cartridges despite recent capacity expansions.
Expecting falling demand, the company initially forecast growth for the sector of just 7 percent in fiscal 2010, which began on April 1, after 18 percent growth in fiscal 2009, but first-quarter results indicated ATK would beat that forecast, Murphy said. He did not specify a new target.
ATK shares closed nearly 3 percent lower at $88.11 on Monday.
Rob Stallard, analyst with Macquarie Securities, recently downgraded the stock to neutral from outperform, saying it was well-placed to report better earnings growth than its peers, but would likely lag recovering cyclical companies.
(Reporting by Andrea Shalal-Esa, editing by Leslie Gevirtz) Keywords: AIRSHOW ATK/ (paris.equities@reuters.com; +33 1 4949 5452; Reuters Messaging: tim.hepher.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.