Home / News / Weekly Roundup July 25 – July 29 2016: Defense Tech Makers Show Life in 2Q Earnings & more

Weekly Roundup July 25 – July 29 2016: Defense Tech Makers Show Life in 2Q Earnings & more

July 25 – July 29 2016

A Note From Our President & Founder Jim Garrettson

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A new earnings season continued to dominate investors’ attention spans this week and those with keen interests in the aerospace, defense and government contracting sectors were no exception.

Eleven contractors listed in our GovCon Index and five in both the GCI and S&P 500 reported their latest quarterly financial results this week to market observers a barometer to examine industry’s health as global security and geopolitical dynamics continue to change.

Two GovCon giants in particular stood out from the rest in the form of Raytheon and L-3 Communications, both of which increased their 2016 financial forecasts with second quarter “Street Beats” in earnings and sales.

Both defense technology makers cited international business as a driver of their year-over-year revenue increases and described the global arms market as one they expect to see increased activity this year through foreign military sales initiatives or other means.

Other notable beats and earnings outlook boosts this week came from General Dynamics and Northrop Grumman, while Boeing held firm on its full-year overall revenue and defense sales guidance despite a 2Q net loss on writedowns in the tanker program and the commercial jet business.

Lockheed Martin, another giant that defense-oriented investors watch closely,  reported April-June results last week and said the company was subsidizing F-35 production with its own cash as the wait continues for a new contract to cover production lots nine and 10.

As of this publication’s send, the GovCon Index is on pace for a nearly half-point weekly gain helped in part on two days of gains in L-3 and Raytheon shares as investors appear to be looking at this latest round of contractors’ earnings on a case-by-case basis.

Financial reports next week from Harris Corp., Cubic Corp. and Huntington Ingalls Industries will help paint a greater picture of the overall GovCon industrial base’s health and performance.

THE WEEK’S OTHER TOP 10 GOVCON STORIES

Northrop CEO Eyes Tech Services Segment Reposition Versus Sale or Spinoff
Wes Bush describes the business’ current approach as one of “portfolio tuning” and one that can focus on programs with a “technology componentry.”
9 Firms Win Spots on $1.8B Navy Training Systems Support IDIQ
Awardees will bid for orders to operate and maintain training devices, manage systems and perform engineering work under the potential five-year contract.
IBM Vet David McOmber Joins QTS as Public Sector, Federal Sales Head
McOmber takes up his new role at data center and cloud services contractor QTS a year after its combination with Carpathia.
Former L-3 NSS Exec Lexi Alexander Joins ASRC Federal as BD Lead
Alexander served as SVP of business development and chief growth officer at the former L-3 National Security Solutions business now part of CACI.
Joe Ayers on The Future CSC-HPE’s Federal Footprint, Trends in Federal Healthcare IT & Big Data
HPE’s federal enterprise group lead also discusses IT spending strategy shifts at agencies in this Q&A with ExecutiveBiz.
Paul Smith: Red Hat Extends Subscription Program to Microsoft’s Azure Govt Cloud
Red Hat will give its public sector clients access via the Cloud Access program to the Microsoft Azure and Azure Government systems.
Lockheed, 3 Universities Team Up to Chase Sandia Labs Mgmt Recompete Contract; Rick Ambrose Comments
NNSA’s current contract with a Lockheed subsidiary to manage Sandia National Laboratories ends in April 2017.
Belcan Targets IT Security Market With Intercom Consulting & Federal Systems Buy
Belcan is a technical services and engineering consultancy provider and Intercom offers IT platforms and services to government agencies.
Vice Adm. Raquel Bono: Humana, Health Net Tricare Contracts to Have Minimum 9-Month Transition Period
Humana was selected to help operate Tricare in DHA’s East region and Health Net was chosen for the West region.
Army Picks 7 Companies for $135M Tech R&D Support IDIQ
Nineteen proposals were submitted to the service branch for the potential five-year contract that will have work awarded via individual task orders.

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