CACI International [CACI] on Wednesday lowered its top and bottom line expectations for its current fiscal year due to continued contract delays, slower run rates and the decline in purchases related to Afghanistan.
Following congressional passage in January of an omnibus appropriations act to fund the federal government through the end of September and to put sequestration on the backburner for two years, CACI and other companies believed that there would be more clarity regarding federal spending and opportunities for the next two years.
But that hasn’t been the case, at least not as far as CACI is concerned.
“Our lower FY ’14 guidance reflects reduced government spending and delays in award activity,” Ken Asbury, CACI’s president and CEO, said in a statement. “We are disappointed that these factors have not been mitigated by the passing of the 2014 appropriations act, as we had anticipated.”
CACI now expects sales to be in the range of $3.5 billion to $3.6 billion, down $150 million to $200 million from prior guidance. Net income is expected to be between $130 million, $5.12 earnings per share (EPS) to $140 million ($5.51 EPS), $12 million lower than the previous range ($5.59 to $5.98) despite a 1 percent drop in the corporate tax rate.
The lower than expected earnings results are due in part to $13 million in one-time, pre-tax expenses associated with the company’s acquisition of cyber security and signals intelligence company Six3 Systems last year.
Asbury said that the integration of Six3 is going well overall and that CACI is pleased with its performance.
CACI said that it isn’t seeing cancellations of any bids it has submitted, adding its new forecast includes “little to no new business.” It also said that Afghanistan-related material purchases are not matching those in the second half of its FY ’13.
CACI reports its third quarter FY ’14 results on April 30.
CACI’s lowered expectations came a week after
Leidos Holdings [LDOS] reported disappointing FY ’15 guidance due to continued weakness in the defense and federal civilian markets.