ST Eng

ST Eng: Stable results largely in line with expectations. FY2010 Rev at $6.0b +7.9%yoy and profit of $491.0m +10.6%yoy. Profit was also boosted by an accounting policy change resulting in a decrease of $39.5m in depreciation charges. Of the 4 segments, rev growth was from Land Systems and Marine sectors while Aerospace and Electronics revenues were comparable to prev yr, profit was up more than 10% for all segments…

Higher shipbuilding and ship repair were main contributors to Marine, and Land Systems benefitted from its automotive and service & trading divisions. Co expects rev for Aerospace to remain stable and rev to increase for other businesses, all segments' profit to continue to increase in FY2011…

Order book at hefty $11.5b compared to 2009 at $10.3b with mix of contracts in all 4 segments. Dividend of 11.55c per share declared, tgt with prev interim of 3.00c in Sept translates to a 4.62% div yield based on last traded price. Current P/E 19.44x is close to hist avg of 19.66x…

Deutsche maintains Buy with TP at $3.95 citing deeper involvement with US military and positive prospects, and Citi maintains Buy with TP at $3.80 also likes div payout at 90%, and growth outlook. DBS maintains Buy with TP at $3.85.