SAIC Inc. fell the most in seven months after losing its largest government contract to Lockheed Martin Corp.
Shares of SAIC, based in McLean, Virginia, declined 3.1 percent to close at $11.86 in New York. They fell as much as 5.2 percent, the most since Nov. 9, 2011, in earlier trading.
Lockheed Martin, based in Bethesda, Maryland, on June 15 beat SAIC for a Defense Department contract valued as high as $4.6 billion to operate a communications network known as the Global Information Grid.
The contract is for as long as seven years if all options are exercised, and its estimated value for the three-year base period is $1.91 billion, Alana Casanova, a spokeswoman for the Defense Information Systems Agency, said today in an e-mail.
SAIC, the eighth-largest contractor on the Bloomberg Government top 200 list, has received at least $3.6 billion for the work since 2001, according to data compiled by Bloomberg.
It was SAIC’s biggest contract with the U.S. government, according to Stifel Nicolaus, a St. Louis-based investment bank. The firm cut its fiscal 2014 earnings estimate to $1.26 a share from $1.38 a share and maintained its hold rating on the shares.
SAIC will probably protest the contract loss, Michael Lewis, an analyst at Lazard Capital Markets in New York, said yesterday in a note to clients.
“We have seen protests turn the tables on a winning firm before,” Lewis wrote. “While it is still too early to make this call, there remains a possibility that this contract could make its way back” to SAIC.