The Future of Aerojet Rocketdyne

[Craftyatom]

Stock price is thought to be a barometer of future earnings so at least part of Aerojet's future appears to have been answered by the market place.

I'd argue that stock price is more of a Ouija board than a barometer, but your point is taken.  $AJRD has improved significantly over the past few years.  I went looking to see how that growth might've gone.  Here is a rough timeline put together by me: someone with no experience in the stock market, a cursory knowledge of Google, and a decent mental history of rocketry over the past five years.

October 5th, 2015: This thread begins.
Over the next 598 days, the Dow grows 26.3%, while $AJRD grows 24.7% (.03% per day).  Mild underperformance.
May 24th, 2017: DARPA selects Boeing's proposal for the XS-1, including AJR's AR-22 engine.
Over the next 672 days, the Dow grows 22.6%, while $AJRD grows 62.0% (.07% per day).  Significant growth.
March 26th, 2019: Pence moves the date for a manned Moon landing up to 2024 (from 2028).
Over the next 165 days, the Dow grows 5.1%, while $AJRD grows 54.0% (.26% per day).  Very significant growth.
September 6th, 2019: The day before this post.
See the attached graph for more detail.

If one is inclined to read into these sorts of things, they might gather that a lot of AJR's business involves the XS-1 and SLS.  I don't think that's an unreasonable assumption.  Others have talked about the importance of their solid and electric programs, but the liquid engines make them a lot of money - perhaps most of their money?  (I couldn't find an earnings statement that itemized.)  So their growth is all well and good, but it may well be predicated on two large programs.

This leaves open the possibility that, if those two large programs encounter serious problems, AJR could be in trouble.  In some ways, these programs are the most stable and investor-friendly possible: they're large government contracts from different agencies.  Sounds like pork for all.  Sure, they've had issues now and then, but come on... What are the chances that both the SLS and XS-1 programs shut down within the next 5 years?

[RonM]

A quick look at Aerojet Rocketdyne's 2018 Annual Report shows the following sales data:

NASA 25%
US Air Force 18%
US Army 15%
Missile Defense Agency 24%
US Navy 7%
Other US Gov 5%
Other 6%

They're a big defense contractor making a good profit and will not go out of business even if SLS shuts down. It will hurt, but DOD sales will keep them going.

[elist]

Here is a rough timeline put together by me

Thats a pretty good timeline of events.  I'd also add in:

* Apr 2018 - Northrop Grumman's announcement that OmegA would be using two RL-10 instead of BE-3U.
* August 2018 - Aerojet Rocketdyne finished and delivered the electrical power generator (MMRTG) for NASA’s Mars 2020 rover to the U.S. Department of Energy
* October 2018 - OmegA's future looks more and more likely with an Air Force award in $792m. Meaning another RL10 customer is still viable.
* August 2019 -NASA agreed to give Mobile Launcher Platform-3 (MLP-3), as well as High Bay 2 in the VAB up for OmegA usage. 

[ncb1397]

Aerojet Rocketdyne probably makes money on most U.S. launches whether they are SLS or SpaceX. This story kind of drives it home:

The mission began when Aerojet Rocketdyne’s RS-68A engine ignited to provide more than 705,000 pounds of liftoff thrust that helped boost the Delta IV rocket off the pad. Following the boost phase of the flight, a single RL10B-2 engine ignited to provide 24,750 pounds of thrust to power the upper stage into orbit. Twelve Aerojet Rocketdyne MR-106H monopropellant (hydrazine) thrusters packaged in four modules on the Delta IV upper stage provide roll, pitch and yaw control as well as propellant settling burns.

....

The GPS III SV02 satellite, built by Lockheed Martin for the Air Force, uses Aerojet Rocketdyne thrusters for orbit maintenance and adjustment, attitude control and end-of-life decommissioning. The spacecraft is equipped with 12 Aerojet Rocketdyne MR-103G thrusters, each generating 0.2 pounds of thrust, and six MR-106L thrusters, each producing 5 pounds of thrust.

https://ir.aerojetrocketdyne.com/news-releases/news-release-details/aerojet-rocketdyne-helping-propel-modernization-gps-satellite

That is 32 Aerojet Rocketdyne products on a single launch. Even if the launch was done on a Falcon, they still would bring millions in revenue on each launch providing propulsion for the satellite.

[testguy]

Northrop Grumman selected Aerojet be be on the team (only team bidding) on the Minuteman lll replacement. Total DoD outlay will be 62 billion dollars. It is not yet clear what Aerojet’s piece of the pie will be.  Aerojet will provide one of the solid propellant stages, don’t yet know which one or more stages will be contracted to Aerojet. Also Aerojet will provide the post boost system.  This is a bus which deploys the multiple re-entry vehicles.  Based on Minuteman lll the post boost contract will be a large contract.

[catdlr]

Aerojet Rocketdyne Manufacturing B-Roll


Aerojet Rocketdyne
Published on Sep 16, 20

Check out our Camden Arkansas workforce, Advanced Manufacturing Facility interior and exterior.

[Craftyatom]

Well, it seems that the question posed in this thread has finally been answered.  Lockheed has agreed to acquire AJR for $4.4 billion.  The acquisition is expected to close in the second half of 2021.

The largest U.S. defense contractor Lockheed Martin announced Dec. 20 it has inked a deal to acquire rocket engine and missile manufacturer Aerojet Rocketdyne for $4.4 billion.

James Taiclet, Lockheed Martin’s president and CEO, said the acquisition gives the company a larger footprint in space and hypersonic technology.

Link

I know this is a bit of a necro, but I believe this thread provides some good context.

Obviously the acquisition is about far more than just space systems, but they do play a role.  Personally, I'm a bit surprised that they didn't try this prior to the ICBM contract last year.

[john smith 19]

Well, it seems that the question posed in this thread has finally been answered.  Lockheed has agreed to acquire AJR for $4.4 billion.  The acquisition is expected to close in the second half of 2021.

AJR tired tried to buy ULA, now they get bought by one of ULA's parents.

And so the USG's list of suppliers shrinks even further. 

That should pump up LM share price even further.

[bulkmail]

Another thread discussing the Lockheed Martin acquisition: Lockheed Martin buying Aerojet Rocketdyne