A Note From Our President & Founder Jim Garrettson
A new earnings season continued to dominate investorsâ 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 industryâs 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 âStreet Beatsâ 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 2QÂ 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.
Northrop Grumman (NYSE: NOC) has secured a potential $167.1 million contract modification from the U.S. Navy to supply four lot 6 full-rate production Ground/Air Task Oriented Radar systems. Marine Corps Systems Command is the contracting activity and will obligate the full contract amount using the U.S. Air Force’s other procurement funds for fiscal year 2024,
Executive Mosaic’s GovCon Index advanced 1.08% before the weekend and averted a third consecutive losing week. The index, which tracks the stock performances of 30 major government contractors, ended at $4,786.97 for a 0.13% week-on-week gain. Wall Street concluded the week with a tech sell-off, and only the Dow Jones Industrial Average (+0.01%) yielded a gain.
Heather Newlin, a GovCon industry executive, has joined federal information technology company NuAxis Innovations as chief delivery officer. NuAxis Innovations CEO Raza Latif announced Newlin’s appointment in a LinkedIn post published Wednesday. “With Heather’s extensive experience in service delivery and her expertise in leading mid-sized federal businesses, I am confident that she will lead us