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July 22 Market Close: GovCon Index Shakes Off Weak Open, Honeywell Plummets on Sales Outlook Cut

GovConIndexUPExecutive Mosaic’s GovCon Index reversed an initial weak open to register a gain Friday that was not enough to push the GCI to positive for the week as second quarter earnings reports started for government contracting companies.

The GovCon Index added 0.289 points to 81.788 Friday but ended at a nominal five-day decline of 0.031 points with Thursday’s large sell-off in defense and GovCon stocks as a weight against the GCI.

Gainers and laggers for the week were split even at 15 with five of the GCI’s 11 S&P 500-listed stocks in positive from July 15.

Friday’s GCI second quarter reports came from Honeywell International (NYSE: HON) that topped Wall Street’s earnings forecast but missed the Street’s consensus revenue estimate; and Textron (NYSE: TXT) that beat analyst expectations for both figures.

Honeywell ended Friday as the GCI’s largest lagger after the industrial conglomerate lowered its full-year revenue outlook and lifted the lower end of its earnings per share guidance.

Textron left its EPS forecast unchanged and the business jet maker added 61 cents — or 1.56%.

Boeing pared its losses to 6 cents from an early morning trough of $2.90 — or 2.17 percent — after the airplane maker detailed $2.05 billion in charges on second quarter earnings that will amount to $3.23 per share.

The charges include $393 million on the KC-46 refueling tanker for the Air Force.

Boeing will report Wednesday and the remaining “Big Five” U.S. defense primes are also lined up for next week: General Dynamics (NYSE: GD), Northrop Grumman (NYSE: NOC) and Raytheon (NYSE: RTN)

Lockheed Martin (NYSE: LMT) rebounded Friday after a large selloff Thursday as investors considered comments in its second quarter statement that the company is subsidizing F-35 production without a new contract and needs a new one from the Defense Department to maintain cash flow.

Bethesda, Maryland-based Lockheed also boosted its full-year earnings and revenue outlooks.

U.S. stocks slightly advanced and the S&P 500 topped its previous record close by one-hundredth of a point as investors continued to welcome earnings reports from blue chips and looked past commodity declines and a drop in the British pound.

Top GovCon Index Net Gainers

Symbol Company $ Current Price Net Change ▴ % Change
LMT Lockheed Martin * 257.31 3.17 1.25%
CACI CACI International 94.85 1.86 2.00%
LDOS Leidos Holdings 50.40 1.49 3.05%
NOC Northrop Grumman * 219.60 1.39 0.64%
SAIC Science Applications International Corp. 61.21 1.33 2.22%

Top GovCon Index Percentage Gainers

Symbol Company $ Current Price Net Change % Change ▴
LDOS Leidos Holdings 50.40 1.49 3.05%
SAIC Science Applications International Corp. 61.21 1.33 2.22%
CACI CACI International 94.85 1.86 2.00%
MMS Maximus 59.69 1.04 1.7%
CSRA CSRA * 25.56 0.43 1.71%

Market Summary

Advancing GovCon Index Issues 17
Declining GovCon Index Issues 12
Unchanged GovCon Index Issues 1
Index Value Net Change % Change
GovCon Index 81.788 +0.289 +0.355%
S&P 500 2, 175.03 +9.86 +0.46%
Dow Jones Industrial Average 18, 570.85 +53.62 +0.29%
NASDAQ 5, 100.16 +26.26 +0.52%

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