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Companies Assess Economy's Impact
(Michael Nagle - Bloomberg News)
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There has been clear evidence of a steadily weakening economy throughout the quarter, which causes us to expect further credit deterioration and led us to increase our loan loss allowance.
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Not everyone was lowering his expectations. Nicholas D. Chabraja, chief executive of General Dynamics, said the mammoth defense contractor has plenty of work to tide it over.
Arguably, the best thing about the quarter from a forward-looking perspective was the strong order intake. As a result of nearly $10 billion of orders, our backlog grew by $3 billion to almost $50 billion.
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Likewise, Bruce L. Tanner, the chief financial officer at Lockheed Martin, hinted that it's always good to be buying when everyone else is selling.
I think someone once described our acquisition practice as building a string of pearls and the like; I think that's a pretty good analogy. I still see that as we go forward, the ones we are looking at are probably on the $0.5 billion list, bolt-on niche acquisitions that give us access to either some technologies we didn't previously have, customer intimacy, customer access, those sorts of things. So what we are planning on doing is probably no different than we have done in the past, but there could be a greater volume of those coming up in the not too distant future.
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Most companies outlined their plans for dealing with the downturn. Robert Levin, Fannie Mae's interim chief financial officer, said the mortgage finance company was "very focused on identifying and attacking the trouble spots in the business."
