netrashetty
Netra Shetty
Goodrich Corporation (NYSE:GR) manufactures and sells components and systems for commercial and military aircraft. With jet fuel prices increasing, commercial airlines are demanding more fuel efficient aircraft like Boeing’s 787. Furthermore, developing countries are demanding more planes. GR's aftermarket sales for commercial and business airplanes are growing since aircraft numbers are rising and planes are always aging.[1]
Business Overview
Business Segments
Goodrich Corporation is broken down into three business segments.
Actuation and Landing Systems (37.8% of total sales)
This segment manufactures and produces flight controls, helicopter's main and tail rotors, complete landing gear systems (including wheels and brakes), fuel controls, electrical systems, surveillance systems, and provide maintenance and repair services associated with aircraft engines and aircraft interior products. They also provide a significant amount of aftermarket support for the entire life cycle of airplanes and defense programs by providing products and services to their customers to replace, repair, or overhaul their products.
Nacelles and Interior Systems (34.7% of total sales)
The Nacelles and Interior Systems business provides maintenance, repair and overhaul services associated with aircraft engines, including thrust reversers, cowlings, nozzles and their components, and aircraft interior products, which include slides, seats, cargo and lighting systems.
Contents
1 Business Overview
1.1 Business Segments
1.2 Actuation and Landing Systems (37.8% of total sales)
1.3 Nacelles and Interior Systems (34.7% of total sales)
1.4 Electronic Systems (27.5% of total sales)
2 Key Trends and Forces
2.1 Increasing Demand for Commercial Aircraft Increases GR’s sales.
2.2 Availability and Pricing of Raw Materials Affects GR's Profit Margin
3 Competition
4 References
Electronic Systems (27.5% of total sales)
The Electronic Systems segment produces a variety of systems that provide flight performance measurements, flight management, fuel controls, electrical systems, and control and safety data, as well as reconnaissance and surveillance systems.
Key Trends and Forces
Increasing Demand for Commercial Aircraft Increases GR’s sales.
About 70 percent of Goodrich Corporation’s sales come from commercial aircraft programs. GR sells products and service for Airbus' A380 and A350XWB, Boeing's 787, Embraer's 190, and Dassault's Falcon 7X. Commercial airlines are demanding more fuel efficient airplanes, such as Boeing’s 787, as jet fuel prices are rising.[2]
Events that have a negative impact on the commercial aircraft market, such as the unexpected terrorist attack on 9/11 or a dramatic increase in fuel-prices that consumers cannot cope with, will also negatively affect GR by negatively affecting their customers.
Availability and Pricing of Raw Materials Affects GR's Profit Margin
Goodrich Corporation purchases aluminum, titanium, steel, carbon fiber, and other various specialty metals which are used to manufacture their products. The loss of a supplier or a delay from the supplier can have a negative impact on GR, since it would pressure their contractual obligations to deliver their products on time. Furthermore, supply fluctuations of these raw materials can lead to prices changes that affect GR's margins. Although titanium prices have decreased, both aluminum and steel prices have had an increasing trend. Steel Prices have been rising and continue to increase.[3] As the price of the materials GR uses increase, GR's costs increase, squeezing margins and slowing income growth.
Competition
GR operates in a highly competitive aerospace industry. The following tables list GR’s major competitors in each business segment, which is further broken down into major aerospace products and systems platforms. GR competes with both domestic and foreign companies.
GR's direct competitors include:
BAE Systems (LON: BA)
Honeywell International (HON)
United Technologies (UTX)
Actuation and Landing Systems Primary Market Segments Major Non-Captive Competitors
Wheels and Brakes Large Commercial/ Ragional/Business/Defense Honeywell Internaional Inc;Messier-Bugatti( subsidiary of SAFRAN); Aircraft Braking Systems Corporation (subsidiary of Meggitt plc); Dunlop Standard Aerospace Group plc. (a division of Meggitt plc)
Landing Gear Large Commercial/Defense Messier-Dowty (a subsidiary of SAFRAN), Liebherr-Holding GmbH; Héroux-Devtek Inc.
Flight Control Actuation Large Commercial/Defense Parker Hannifin Corporation; United Technologies Corporation; GE Aviation; Liebherr-Holding GmbH; Moog Inc.
Turbine Fuel Technologies Large Commercial/Military/Regional/Business Parker Hannifin Corporation; Woodward Governor Company (WGOV)
Trubomachinery Products Aero and Industrial Turbine Components Blades Technology; Samsung; Howmet (a division of Alcoa Inc.); PZL (a division of United Technologies Corporation), Honeywell -- Greer (a division of Honeywell International, Inc.); TECT Corporation
[4]
Nacelles and Interior Systems Primary Market Segments Major Non-Captive Competitors
Nacelles /Thrust Reversers Large Commercial/Military Aircelle (a subsidiary of SAFRAN); General Electric Company (GE) , Spirit Aerosystems Holdings (SPR)
Evacuation Systems Large Commercial/Regional Air Crusiers (a subsidiary of Zodiac S.A.); Smiths Group; Parker Hannifin Corporation
Propulsion Systems Defense Danaher Corp (Pacific Scientific, McCormick Selph, SDI); Scot, Inc. (a subsidiary of Procyon Technologies, Inc.); Talley Defense Systems
Aircraft Crew Seating Large Commercial/Regional/Business Ipeco Holdings Ltd; Sicma Aero Seat (a subsidiary of Zodiac S.A.); EADS Sogerma Services (a subsidiary of EADS European Aeronautical Defense and Space Co.); BE Aerospace, Inc.; C&D Aerospace Group
Ejection Seats Defense Martin-Baker Aircraft Co. Limited
Lighting Large Commercial/Regional/Business/Defense Page Aerospace Limited; LSI Luminescent Systems Inc.; Diehl Luftfahrt Elecktronik GmbH (DLE)
Cargo Systems Large Commercial Telair International (a subsidiary of Teleflex Incorporated); Ancra International LLC, AAR Manufacturing Group, Inc.
[5]
Electronic Systems Primary Market Segments Major Non-Captive Competitors
Sensors Large Commercial/Regional/Business/Defense Honeywell International Inc.; Thales, S.A.;Auxitrol (a subsidiary of Esterline Technologies Corporation)
Fuel and Utility Systems Large Commercial/Defense Honeywell International Inc.; Parker Hannifin Corporation; Smiths Group
De-lcing Systems Large Commercial/Regional/ Business/Defense Aérazur S.A. (a subsidiary of Zodiac S.A.); B/E Aerospace, Inc.
Aerospace Hoists/Winches Defense/Search & Rescue/Commercial Helicopter Breeze-Eastern (a division of TransTechnology Corporation); Telair International (a subsidiary of Teleflex Incorporated)
Optical Systems Defenes/Space BAE Systems (BAESY) ; ITT Industries Inc; L-3 Communications Holdings (LLL) ; Honeywell International (HON)
Power Systems Large Commercial/Regional/ Business/Defense Honeywell International (HON); Smiths Group; Hamilton Sunstrand (a subsidiary of United Technologies Corporation)
Engine Controls Large Commercial/ Regional/Business/ Defense/Helicopter United Technologies (UTX) ; BAE Systems (BAESY) ;Honeywell International (HON) ; Argo-Tech Corporation, Woodward Governor Company; Hispano-Suiza (a subsidiary of SAFRAN)
[6]
Business Overview
Business Segments
Goodrich Corporation is broken down into three business segments.
Actuation and Landing Systems (37.8% of total sales)
This segment manufactures and produces flight controls, helicopter's main and tail rotors, complete landing gear systems (including wheels and brakes), fuel controls, electrical systems, surveillance systems, and provide maintenance and repair services associated with aircraft engines and aircraft interior products. They also provide a significant amount of aftermarket support for the entire life cycle of airplanes and defense programs by providing products and services to their customers to replace, repair, or overhaul their products.
Nacelles and Interior Systems (34.7% of total sales)
The Nacelles and Interior Systems business provides maintenance, repair and overhaul services associated with aircraft engines, including thrust reversers, cowlings, nozzles and their components, and aircraft interior products, which include slides, seats, cargo and lighting systems.
Contents
1 Business Overview
1.1 Business Segments
1.2 Actuation and Landing Systems (37.8% of total sales)
1.3 Nacelles and Interior Systems (34.7% of total sales)
1.4 Electronic Systems (27.5% of total sales)
2 Key Trends and Forces
2.1 Increasing Demand for Commercial Aircraft Increases GR’s sales.
2.2 Availability and Pricing of Raw Materials Affects GR's Profit Margin
3 Competition
4 References
Electronic Systems (27.5% of total sales)
The Electronic Systems segment produces a variety of systems that provide flight performance measurements, flight management, fuel controls, electrical systems, and control and safety data, as well as reconnaissance and surveillance systems.
Key Trends and Forces
Increasing Demand for Commercial Aircraft Increases GR’s sales.
About 70 percent of Goodrich Corporation’s sales come from commercial aircraft programs. GR sells products and service for Airbus' A380 and A350XWB, Boeing's 787, Embraer's 190, and Dassault's Falcon 7X. Commercial airlines are demanding more fuel efficient airplanes, such as Boeing’s 787, as jet fuel prices are rising.[2]
Events that have a negative impact on the commercial aircraft market, such as the unexpected terrorist attack on 9/11 or a dramatic increase in fuel-prices that consumers cannot cope with, will also negatively affect GR by negatively affecting their customers.
Availability and Pricing of Raw Materials Affects GR's Profit Margin
Goodrich Corporation purchases aluminum, titanium, steel, carbon fiber, and other various specialty metals which are used to manufacture their products. The loss of a supplier or a delay from the supplier can have a negative impact on GR, since it would pressure their contractual obligations to deliver their products on time. Furthermore, supply fluctuations of these raw materials can lead to prices changes that affect GR's margins. Although titanium prices have decreased, both aluminum and steel prices have had an increasing trend. Steel Prices have been rising and continue to increase.[3] As the price of the materials GR uses increase, GR's costs increase, squeezing margins and slowing income growth.
Competition
GR operates in a highly competitive aerospace industry. The following tables list GR’s major competitors in each business segment, which is further broken down into major aerospace products and systems platforms. GR competes with both domestic and foreign companies.
GR's direct competitors include:
BAE Systems (LON: BA)
Honeywell International (HON)
United Technologies (UTX)
Actuation and Landing Systems Primary Market Segments Major Non-Captive Competitors
Wheels and Brakes Large Commercial/ Ragional/Business/Defense Honeywell Internaional Inc;Messier-Bugatti( subsidiary of SAFRAN); Aircraft Braking Systems Corporation (subsidiary of Meggitt plc); Dunlop Standard Aerospace Group plc. (a division of Meggitt plc)
Landing Gear Large Commercial/Defense Messier-Dowty (a subsidiary of SAFRAN), Liebherr-Holding GmbH; Héroux-Devtek Inc.
Flight Control Actuation Large Commercial/Defense Parker Hannifin Corporation; United Technologies Corporation; GE Aviation; Liebherr-Holding GmbH; Moog Inc.
Turbine Fuel Technologies Large Commercial/Military/Regional/Business Parker Hannifin Corporation; Woodward Governor Company (WGOV)
Trubomachinery Products Aero and Industrial Turbine Components Blades Technology; Samsung; Howmet (a division of Alcoa Inc.); PZL (a division of United Technologies Corporation), Honeywell -- Greer (a division of Honeywell International, Inc.); TECT Corporation
[4]
Nacelles and Interior Systems Primary Market Segments Major Non-Captive Competitors
Nacelles /Thrust Reversers Large Commercial/Military Aircelle (a subsidiary of SAFRAN); General Electric Company (GE) , Spirit Aerosystems Holdings (SPR)
Evacuation Systems Large Commercial/Regional Air Crusiers (a subsidiary of Zodiac S.A.); Smiths Group; Parker Hannifin Corporation
Propulsion Systems Defense Danaher Corp (Pacific Scientific, McCormick Selph, SDI); Scot, Inc. (a subsidiary of Procyon Technologies, Inc.); Talley Defense Systems
Aircraft Crew Seating Large Commercial/Regional/Business Ipeco Holdings Ltd; Sicma Aero Seat (a subsidiary of Zodiac S.A.); EADS Sogerma Services (a subsidiary of EADS European Aeronautical Defense and Space Co.); BE Aerospace, Inc.; C&D Aerospace Group
Ejection Seats Defense Martin-Baker Aircraft Co. Limited
Lighting Large Commercial/Regional/Business/Defense Page Aerospace Limited; LSI Luminescent Systems Inc.; Diehl Luftfahrt Elecktronik GmbH (DLE)
Cargo Systems Large Commercial Telair International (a subsidiary of Teleflex Incorporated); Ancra International LLC, AAR Manufacturing Group, Inc.
[5]
Electronic Systems Primary Market Segments Major Non-Captive Competitors
Sensors Large Commercial/Regional/Business/Defense Honeywell International Inc.; Thales, S.A.;Auxitrol (a subsidiary of Esterline Technologies Corporation)
Fuel and Utility Systems Large Commercial/Defense Honeywell International Inc.; Parker Hannifin Corporation; Smiths Group
De-lcing Systems Large Commercial/Regional/ Business/Defense Aérazur S.A. (a subsidiary of Zodiac S.A.); B/E Aerospace, Inc.
Aerospace Hoists/Winches Defense/Search & Rescue/Commercial Helicopter Breeze-Eastern (a division of TransTechnology Corporation); Telair International (a subsidiary of Teleflex Incorporated)
Optical Systems Defenes/Space BAE Systems (BAESY) ; ITT Industries Inc; L-3 Communications Holdings (LLL) ; Honeywell International (HON)
Power Systems Large Commercial/Regional/ Business/Defense Honeywell International (HON); Smiths Group; Hamilton Sunstrand (a subsidiary of United Technologies Corporation)
Engine Controls Large Commercial/ Regional/Business/ Defense/Helicopter United Technologies (UTX) ; BAE Systems (BAESY) ;Honeywell International (HON) ; Argo-Tech Corporation, Woodward Governor Company; Hispano-Suiza (a subsidiary of SAFRAN)
[6]
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