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Weekly Roundup April 25 – April 29 2016: Investors Give Mixed Signals on Contractor Stocks & more

April 25 – April 29 2016

A Note From Our President & Founder Jim Garrettson


First quarter earnings season has given investors with keen interest in the aerospace, defense and government contracting sectors a smorgasboard of items to consider as they gauge the industry’s health.

Many of the largest names in our GovCon Index of 30 government contractor stocks reported earnings and revenue that exceeded Wall Street’s expectations.

Lockheed Martin, General Dynamics, Northrop Grumman,  Raytheon and L-3 Communications each posted first quarter earnings and revenue that either met or “Beat The Street” on all fronts and raised either one or both of those key figures in their 2016 guidance.

Boeing posted a sharp 18-percent increase year-over-year in defense sales and left its 2016 outlook unchanged despite an earnings miss on a charge in the KC-46 tanker program.

So why is the GovCon Index on pace for a one-third percent weekly loss?

Raytheon’s stock has declined nearly 3 percent since its earnings release Thursday on investor concern over the company’s profitability in the short term, while shares in CACI International have plummeted almost 13 percent over one-and-a-half days after the services contractor posted third quarter revenue figures below analyst forecasts.

Investors also had another chance to quiz the top leaders at Lockheed and Leidos on the future of both companies after they close their mega-deal as seen in the top two stories of our list below.

Continue reading below for our coverage of their comments to The Street plus those of CACI’s chief executive on their outlooks for the near- and long-term futures, along with a collection of seven other top stories in the government contracting arena for this week.


Roger Krone: SETA Service Contracts Minimal in Leidos-Lockheed IS&GS Combination
Leidos’ CEO gives investors more details on the impending mega-merger and reaffirms the end of summer as the intended date of closure.
Lockheed Awaits UK Regulatory Review Over Leidos Deal; IS&GS 2016 Forecast Lifted
Lockheed’s CEO and CFO update investors on their boosted full-year sales outlook for IS&GS as the merger completion date draws nearer.
Ken Asbury: CACI Narrowed Guidance on Award Timing Delays in 3Q
CACI’s chief executive predicted the pace of contract awards from agencies to pick up in the fourth quarter and help bolster sales.
3 Companies Win Spots on $809M Navy Business Process, Data Services IDIQ
Awardees will also provide ERP planning program support for the Navy’s financial, acquisition and supply management functions.
Navy Awards 12 Spots on $800M Multifunction RF Systems IDIQ
Contractors will compete for task orders to make radio frequency components for electronic warfare and information operations.
NAVSUP Issues Solicitation for Potential $993M Wireless Telecommunications Services IDIQ
Naval Supply Systems Command will accept proposals for the potential five-year contract through June 13.
Raytheon-Vista JV Forcepoint Appoints Matthew Moynahan as CEO
Forcepoint transitioned to its current identity in January and the defense technology contractor holds an 80-percent stake in the venture.
GSA to Release RFPs for Alliant 2, Small Business Track in June
Both vehicles are in the middle of a review process that started upon the release of both draft solicitations in October 2015.
Jet, Chopper, Ship Procurement Featured in HASC-Approved 2017 Defense Authorization Bill
DoD would get $2.9 billion for more Super Hornets and F-35s, plus a $20.6 billion boost to its shipbuilding programs.
PSC Urges House Committee Not to Consider Bid Protest Process Reform Proposals
The trade group representing government services contractors responds to DoD’s push on limits to how a vendor can pursue challenges to awards.

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