CACI International Inc., a technology contractor for the U.S. government, gained 1.1 percent even after it reduced its earnings outlook and missed analysts’ estimates for third-quarter sales and profit.
CACI, based in Arlington, Virginia, recovered after dropping as much as 5.6 percent during morning trading in New York.
“Results and the change of guidance weren’t as bad as people feared,” said Tobey Sommer, an analyst at SunTrust Robinson Humphrey in Atlanta. He has a neutral rating on CACI.
CACI, which gets about 95 percent of its revenue from the U.S. government, has been hurt as agencies cope with automatic budget cuts that began March 1. They are set to strip $85 billion from federal spending by Sept. 30.
The cuts have resulted in “a bunch of uncertainty about how our customer wants to spend,” Ken Asbury, who became CACI’s chief executive officer in February, said in an interview.
Rather than program cancellations, the company has experienced “the little effects as customers try to adjust here and there to what they’re not certain about,” he said.
CACI expects profit from $6.29 to $6.55 a share in the year ending June 30, compared with its earlier forecast of $6.54 to $6.79 a share, the company said yesterday in a statement.
Sales in the third quarter ended March 31 were $906 million, compared with the average analyst estimate of $933 million. Profit in the quarter was $1.62 a share. Analysts had predicted $1.65 a share, the average of 13 estimates compiled by Bloomberg.
Dylan Cathers, an analyst at S&P Capital IQ in New York, said he was “a little perplexed” by the rise in CACI’s shares.
“I don’t think it deserved what it got today given the numbers and the outlook that it posted,” he said in a phone interview. “The only thing that I can point to is that there’s a new CEO on board and perhaps people are positive on him. Perhaps people think he’ll be able to spur a turnaround.”
ManTech International Corp., which also provides engineers and consultants to federal agencies, yesterday reported first-quarter profit lower than analysts’ estimates and cut its full-year earnings forecast to $2.28 a share, from $2.36 a share.
The Fairfax, Virginia-based company fell less than 1 percent to $25.90 at 10:15 a.m. in New York after declining as much as 2.1 percent earlier.