Executive Mosaic’s GovCon Index recorded its worst session in four weeks Wednesday despite gainers as the clear majority after Orbital ATK (NYSE: OA) announced it would restate all financial results dated back to April 2014.
Shares in Orbital ATK plummeted 20.25 percent — or $17.987 — at the stock’s biggest one-day loss in nearly a year after the space systems and weapons maker disclosed the accounting review and said it will also delay the regulatory filing of second quarter results pending the audit.
Dulles, Virginia-based Orbital ATK said it misstated revenue and earnings figures from a potential 10-year, $2.3 billion contract to make ammunition at a U.S. Army plant in Missouri and now believes that program will be run at a net loss to the company for the full term.
Wednesday’s sharp fall puts Orbital ATK’s stock at a year-to-date decline of 2.27 percent compared to unchanged before markets opened Wednesday and a loss of 8.98 percent over 12 months versus the 14.14-percent gain for 52 weeks prior to the opening bell.
Vectrus declined 6.81 percent — or $2.26 — after the Colorado Springs-based government services contractor reported second quarter net income and revenue relatively flat from the prior year period despite a lift to 2016 guidance for earnings, sales and cash flow.
General Dynamics (NYSE: GD) was the GCI’s best net performer Wednesday after research firm Bernstein upgraded the defense contractor to “Outperform” from “Market Perform” and lifted the target stock price to $180 from $168.
Analysts at Bernstein view General Dynamics’ stock as at a discount compared to other large prime contractors since 2002 and project expansion in the company’s defense business on a rising U.S. military budget and increased demand from international allies.
Bernstein also views the company’s information systems and technology business segment as having “exceeded expectations.”
Falls Church, Virginia-based government technology services contractor CSRA (NYSE: CSRA) will report results for its first fiscal quarter after markets close.
Ten of the GCI’s 11 S&P 500-listed stocks posted gains with McKesson Corp. (NYSE: MCK) the lone lagger as U.S. stocks traded negative on declines by energy shares spurred by another fall in crude oil prices.
The S&P 500 composite index had its worst day in a week and the energy sector declined 1.5 percent as crude oil futures in New York settled down 2.48 percent to $41.71 after the Energy Information Administration said U.S. inventory added 1.1 million barrels last week.
Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 82.247 | -0.513 | -0.620% |
| S&P 500 | 2, 175.49 | -6.25 | -0.29% |
| Dow Jones Industrial Average | 18, 495.66 | -37.39 | -0.20% |
| NASDAQ | 5, 204.58 | -20.90 | -0.40% |
| Advancing GovCon Index Issues | 20 |
| Declining GovCon Index Issues | 10 |
| Unchanged GovCon Index Issues | 0 |
Top GovCon Index Net Gainers
| Symbol | Company | $ Current Price | Net Change –´ | % Change |
|---|---|---|---|---|
| GD | General Dynamics * | 151.47 | 2.90 | 1.95% |
| SAIC | Science Applications International Corp. | 61.73 | 0.76 | 1.25% |
| BA | Boeing * | 132.28 | 0.75 | 0.57% |
| LLL | L-3 Communications * | 150.75 | 0.74 | 0.49% |
| CACI | CACI International | 96.37 | 0.67 | 0.70% |
Top GovCon Index Percentage Gainers
| Symbol | Company | $ Current Price | Net Change | % Change –´ |
|---|---|---|---|---|
| I | Intelsat | 2.67 | 0.08 | 3.09% |
| GD | General Dynamics * | 151.47 | 2.90 | 1.95% |
| CAE | CAE | 13.66 | 0.24 | 1.79% |
| CSRA | CSRA | 26.28 | 0.46 | 1.78% |
| SAIC | Science Applications International Corp. | 61.73 | 0.76 | 1.25% |
* Also listed in the S&P 500 composite index
