May 3 Market Close: GovCon Index Sinks on Harris Guidance Cut, CACI’s Extended Slide as Northrop Gets Upgrade

The GovCon Index held negative throughout Tuesday trade and closed at a decline of 0.489 points to 76.365 with Harris Corp. (NYSE: HRS) as the largest lagger after another full-year guidance cut by the military radio maker.

Melbourne, Florida-based Harris fell 5.48 percent — or $4.43 – after the company reduced the 12-month revenue forecast in its third-quarter financial statement and brought full-year earnings expectations to the prior outlook’s lower end.

Harris — also an S&P 500 stock — cited declining orders in the Middle East in its revised outlook and attributed oil price declines to the previous revenue guidance cut issued in February.

Tuesday’s decline swings Harris’ 12-month change to a 5.02-percent loss as the stock was up nearly one-half percent over 52 weeks prior to the market open, while shares are down 12.07 percent since the start of the year.

CACI International (NYSE: CACI) continued its post-earnings slide with decline of 2.29 percent — or $2.23 — and is down 13.5 percent percent over four days since the government and information services contractor reported second-quarter revenue below analyst expectations.

Cubic Corp. (NYSE: CUB) fell 5.19 percent — or $2.16 – a day after the defense and transportation contractor narrowed its full-year earnings guidance and lifted the 12-month sales forecast on added contributions from two companies acquired in the fall.

Northrop Grumman (NYSE: NOC) rose 0.62 percent — or $1.29 – after Drexel Hamilton raised the aerospace and defense contractor’s price target from $207 to $235 and restated the stock’s current “Buy” rating in a research note to investors.

Drexel Hamilton cited Northrop’s prospects for growth from its role as a subcontractor on the F-35 fighter jet program and prime awardee for the B-21 Long Range Strike Bomber.

Defense primes Lockheed Martin (NYSE: LMT), General Dynamics (NYSE: GD), Orbital ATK (NYSE: OA) and Rockwell Collins (NYSE: COL) also posted gains with L-3 Communications (NYSE: LLL) up for a second straight session after an upgrade from Goldman Sachs Monday.

U.S. stocks declined on global growth worries stemming from data that showed manufacturing in China showed contraction for a 14th consecutive month to fall below analyst expectations as well as a decline in overall employment for April, CNBC reported.

The S&P 500 composite index plummeted 0.87 percent with energy shares as the biggest decliner on a decline in U.S. oil futures by 2.52 percent to $43.65 a barrel.

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