The company faces significant risks from legal proceedings (e.g., DOJ investigations, SEC settlements) related to contract pricing disputes, export violations, and employee hiring practices. Pratt & Whitney's powder metal issue and related inspections create substantial costs and potential disruptions. Global supply chain disruptions, inflation, and higher interest rates also pose risks to profitability and liquidity. Government budget uncertainties and potential shutdowns could impact operations. Uncertainties in contract estimates and potential changes in accounting estimates add to the financial risks.
Financial Upside
The company experienced organic growth in net sales across segments, particularly in commercial aerospace aftermarket and defense. The absence of the Powder Metal Matter charge in 2024 positively impacted results. Favorable tax rulings and settlements reduced tax liabilities. The sale of the CIS business generated a gain. Increased bookings in defense and commercial aerospace segments suggest future revenue potential.
