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What: Shares of CACI International (NYSE: CACI ) , an information technology and professional service provider primarily to the U.S. government, dipped 14% today after it reported disappointing third-quarter results.
So what: For the quarter, CACI International reported a 31% increase to adjusted EPS to $1.45 on a 1.6% increase in year-over-year revenue with a 16% increase in contract awards being the primary growth driver. Despite the $0.01 EPS beat, revenue came in below Wall Street's expectations. CEO Paul Cofoni said, "We are … experiencing the effects of budget uncertainty on our customers, leading to slower-than-anticipated procurement actions that are affecting our revenue growth." Unsurprisingly, CACI's revenue forecast going forward also missed Wall Street's expectations.
Now what: As icing on the cake, Credit Suisse downgraded CACI International to neutral from outperform this morning. I can't say I disagree much with Credit Suisse's assessment given that the U.S. government is actively looking for ways to cut costs as budget uncertainties are bound to take a toll on companies just like CACI. At just nine times forward earnings the company is beginning to look attractive, but there's still too much budget uncertainty to be optimistic about its prospects over the next couple of quarters.
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