October 13 Market Close: GovCon Index Cuts Losses in PM Trade, Cubic Weighs After 4Q Earnings Caution

GovConIndexDOWNExecutive Mosaic’s GovCon Index pared much of its losses during afternoon trade Thursday but failed to close in green as Cubic Corp. (NYSE: CUB) tumbled after the company warned full-year earnings and revenue would fall below prior guidance on funding delays from the Defense Department.

GovCon Index gainers slightly edged laggers after a morning drop of more than 1 percent and six of its 11 S&P 500 companies closed green as the latter U.S. bellwether also reversed from steep to narrow red on investor concerns about weak export numbers from China.

Cubic ended as the GCI’s worst performer after the defense and transportation contractor said it expects revenue of $1.435-$1.455 billion for its 2016 fiscal year ended Sept. 30 versus the $1.51 billion-$1.56 billion guidance issued in August upon the release of third quarter financial results.

The consensus Wall Street forecast has Cubic’s full-year sales at $1.52 billion and earnings per share at $0.92 with the company’s official financial report due in late November.

San Diego-based Cubic added it expects earnings per share will be below the $0.85-$1.05 outlook also issued in August on an EPS guidance cut from the previous $1.20-$1.40 forecast.

Volume for Cubic closed at 1.02 million shares traded at roughly seven-fold above the three-month average.

GovCon Index-S&P 500 stocks led net gainers in the GCI with primes Northrop Grumman (NYSE: NOC), General Dynamics (NYSE: GD), Honeywell International (NYSE: HON), Lockheed Martin (NYSE: LMT) and Raytheon (NYSE: RTN) in the top five.

Co-listed Harris Corp. (NYSE: HRS) weighed on the GCI and ended as its second-lowest net performer.

New data showed China’s exports fell 10 percent in September to exceed economists’ expectations and the S&P 500 hit a 1-percent decline mid-morning before a reversal in afternoon hours on a recovery in oil prices and decline in the U.S. dollar, according to Reuters.

Crude futures in New York settled up 26 cents to $50.44 a barrel and the London-based Brent benchmark added 22 cents to $52.03 a barrel.

Market Summary

Index Value Net Change % Change
GovCon Index 79.229 -0.155 -0.195%
S&P 500 2, 132.55 -6.63 -0.31%
Dow Jones Industrial Average 18, 098.94 -45.26 -0.25%
NASDAQ 5, 213.33 -25.69 -0.49%
Advancing GovCon Index Issues 11
Declining GovCon Index Issues 19
Unchanged GovCon Index Issues 0

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