Weekly Roundup May 2 – May 6 2016: Defense Earnings Season Rolls On & More

May 2 – May 6 2016

A Note From Our President & Founder Jim Garrettson


The first full week of May represented another checkpoint for investors to gauge the financial performance of the U.S.’ largest government contractors and get an idea of what the domestic and global GovCon markets will look like this year and beyond.

For this new round of earnings reports, the Middle East appeared to be a major driver of top-line results for two GovCon product makers and another pair of services-oriented companies started the year with earnings and revenue that met or “Beat The Street.”

Orbital ATK and Harris Corp. both said their respective first and second fiscal quarters saw lower volumes in the Middle East, a trend that comes in conjunction with low oil prices.

For GovCon’s services side, both Engility and ICF International posted first quarter earnings and revenue figures above analyst expectations in a possible hint to investors that this arena of government contracting still has some returns to offer.

As of this publication’s send, our GovCon Index of 30 large contractor stocks is on pace for a 0.7-point gain thanks to Huntington Ingalls Industries, which has surged 6.5 percent since Thursday morning’s open after the Newport News-based shipbuilder soared past Wall Street’s first quarter expectations.

Our senior editor Ross Wilkers and WMAL radio’s “National Defense Week” anchor Francis Rose recorded a discussion set to air this Sunday morning on defense contractors’ financial performance and the differing pictures product makers and service providers have given investors.

Wilkers and Rose also overviewed why some analysts singled out Northrop Grumman as a prime stock to watch this year and next, plus the defense industry’s current M&A picture.

Tune your radio dial to WMAL 630 AM and 105.9 FM in Washington or stream the station online from 11 a.m. Eastern time Sunday to hear the full program and hear the full discussion between Wilkers and Rose.

Also check out the “National Defense Week” website here for the full show archive and segments from previous programs, plus subscribe to the podcast on iTunes or Stitcher Radio.


Lynn Dugle: Engility Shifts to Organic Growth Focus, Seeks $5B in New Bids
Dugle spoke with investors Thursday to discuss first quarter financial results in her first public comments since she became CEO March 21.
Booz Allen to Support Intell Community IT Enterprise Under Potential $400M DIA Contract
DIA’s Virginia Contracting Authority office received five bids for the potential five-year award to help support the ICITE effort.
Vencore Lands $400M Systems Engineering, Integration Support Contract With US Agency; Mac Curtis Comments
The unidentified federal agency selected Vencore to help deploy platforms to support interoperability of enterprise systems.
Susan Balaguer Joins Engility as SVP, Chief HR Officer
Balaguer most recently served as SVP of human resources at CACI and is a 20-year HR management veteran.
Health Services Contractor DLH Buys Danya for $38.75M in Federal Market Push
Atlanta-based DLH also adds Danya’s contracts with agencies such as CDC, DHS, HHS and the Navy.
Army Invites Bids for $5B Desktop, Mobile Computers Follow-On Contract
Submissions for the potential 10-year Army Desktop and Mobile Computing-3 vehicle are due June 6.
DOJ Requests Info on Body-Worn Cameras for Market Survey
Vendors are asked to detail physical, software and data features of the cameras in their responses.
OMB Asks Federal Agencies to Prepare Program Cost Estimates for Next US President
White House budget chief Shaun Donovan sent agencies a memo to help build a cost database for an FY 2018 spending plan.
GSA’s 18F Hub Unveils New Contract Forecasting Tool
18F designed the open source platform for small businesses to find information on contracts and identify potential opportunities.
Mary Miller Named DoD Principal Deputy Assistant Secretary for Research, Engineering
Miller led research and technology programs at the Army in her former role as a deputy assistant secretary there.

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