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Defense contractors reported a 2.6 percent decline in revenue in 2013, due mostly to sequestration and the ongoing drawdown of forces in Afghanistan, according to a Deloitte analysis. Seventeen of the top 20 defense contractors saw a decline in revenue, with those focused on ground equipment, such as armored vehicles, taking the biggest hit. “Generally, companies involved in military aircraft and naval ships experienced flat revenues,” states the report, released April 28. Profit margins, on the other hand, increased 17.9 percent. The report notes that half of this increase is attributable to “the absence of large one-time charges,” suggesting suppliers are finding new ways to cut costs and increase efficiency margins. "With US defense budgets being cut, defense contractors are likely to experience continued revenue declines," said Deloitte Vice Chairman Tom Captain. "We anticipate that U.S. defense contractors will aggressively address this revenue shortfall with foreign military sales, acquisitions, new product introductions, and growth in adjacent markets."