After fighting off the sequestration woes in late 2013, government contracting firms continue to provide mixed signals. Midyear Q2 earnings released over the past month revealed not a changing Aerospace and Defense landscape, but rather a need for more efficient business models executed by government contractors. While award activity for many has risen off the sequestration floor, the spending outlook by the Pentagon has continued to be cautious and consequently cash flow for most firms isn’t coming in as strong as a year ago (Q2 2013). Companies like Boeing, Raytheon and Booz Allen have experienced modest success maintaining backlog, but others like ManTech have been constrained by new business award delays and the Afghanistan draw down. As a result, this month’s release of top Aerospace and Defense contractors’ earnings were marked by generally lower revenues, and in response, companies such as Lockheed Martin, Northrop Grumman, and Booz Allen Hamilton cited strong execution and cost cutting strategies for stronger returns.
Read the entire Market Update for a detailed review on the following topics:
- With Cautionary Spending, Contractors Turn to Execution for Sustainability
- Recent Transactions
- Government Services Industry Performance
- Public Company Comparables
- Recent Industry M&A Transactions
- Representative ACP Transactions