Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of DigitalGlobe
So what: Apparently the fears of a pullback in government spending were overdone, because DigitalGlobe reported a 12% boost in revenue to $87 million, aided mostly by its defense segment, and reversed a year-ago loss to report a profit of $0.08. Wall Street had only been looking for DigitalGlobe to earn $0.01 on revenue of $83.7 million. In addition, the company announced that it expects revenue growth of 14% for the remainder of the year, which implies full-year revenue of $387 million – well ahead of the Street's expectation of $372.3 million.
Now what: Today's earnings report may help end what has been a precipitous decline for DigitalGlobe's stock, but it does little to dispel fears that lawmakers have yet to find a way to cut an additional $1.5 trillion out of the federal budget and, if no resolution is met, in January, automatic cuts of $500 billion will trigger in the defense sector. We've already seen weak earnings from L-3 Communications
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