Another third quarter earnings reporting season is now underway for many large blue chip companies including some in the government contracting arena but that is merely one of many things looming over the business and GovCon communities.
The Federal Reserve meeting Nov. 1-2 and of course the presidential election the following week are giving investors additional dynamics to consider along with the seasonal gauging of financial performances at some of the world’s largest corporations.
Most traders expect no interest rate hike by the Fed in November but are leaning toward a move in December, are attempting to make sense of a chaotic election and trying to figure out how businesses are navigating the current political and economic environments.
Many companies have decided to show extreme caution in their guidance to The Street as only 21 S&P 500 corporations issued financial outlooks in September to show a record low for any month since 2000, per the Wall Street Journal.
Against that backdrop, third quarter financial season for government contractors including those in our GovCon Index started this week with reports from S&P 500 firms Textron and Honeywell.
Textron’s stock spiked 3 percent Thursday after the aircraft maker reported year-over-year earnings and revenue increases for the July-September period, while Honeywell shares added three-quarter a percent Friday as of midday on mixed results with some growth-oriented guidance.
Next week is the traditional primetime week for the large GovCon primes as Boeing, General Dynamics, Lockheed Martin, Northrop Grumman, Raytheon and L-3 Communications will all disclose third quarter results and speak with analysts to discuss defense market conditions and outlooks.
DigitalGlobe will also detail its financial picture to investors nearly two weeks after the satellite imagery giant announced the $140 million acquisition of The Radiant Group.
This season figures to more than just about dollars and cents for GovCon firms and investors as the defense spending and post-election environments all contribute to a very murky picture.
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