Dell, Others May See Revenue Fall on Budget Cuts, Barron’s Says
Dell Inc., Motorola Inc. and Oshkosh Corp., which are among the companies that get more than 25 percent of their revenue from city, state and federal spending, may see sales fall on government budget cuts, Barron’s said.
President Barack Obama’s bipartisan commission may recommend the government cut spending to 21 percent of the overall economy from 24 percent, the weekly newspaper said in its Sept. 6 edition. Information technology, industrial and health-care companies may be the most vulnerable businesses, Barron’s said, citing analysts.
Dell got about 27 percent of its $61 billion in 2009 sales from government services, while about 32 percent of Motorola’s annual sales come from government entities, Barron’s said. Oshkosh gets 75 percent of its business from the defense industry and fire truck-related orders, according to Barron’s.
Granite Construction Inc. and St. Jude Medical Inc. also may lose some revenue, Barron’s aid. Granite Construction works with federal agencies and state governments on road, bridge, airport and dam projects, while St. Jude makes cardiovascular medical devices. The stock “could take a beating” if states and the federal government reimburse hospitals at a lower rate, Barron’s said.
To contact the reporter on this story: Mina Kawai in New York at minkawai@bloomberg.net.
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