What is it that Steinbeck wrote about the best-laid plans of mice and men? That they don't long survive the meddling of the U.S. government?
Whatever the precise quote, I must reluctantly agree with the general sentiment. Last week I made a real effort to break away from the ongoing soap opera starring L-3 Communications
So much for that idea
But I'm afraid events have overtaken my intentions. The news since earnings broke (if anyone's still interested, sales were up 10% and profits nearly quadrupled) has since eclipsed last week's events. Dominating the headlines today: three recent contract awards from the U.S. government which may hold even more promise for L-3's future than did the news that management raised guidance last week.
Lost in translation
First, on Monday, archrival DynCorp announced in its own earnings release (sales up 2%, and $0.22 per share in profits, since you ask) that the GAO has upheld L-3's protest of the disputed translation contract. As a result, DynCorp and L-3 may have to re-bid to see who will actually win the contract going forward. If I understand the process, though, it's certain that L-3 will get to continue fulfilling the contract in the meantime, giving the company at least two more months' worth of revenue (and denying same to DynCorp.)
Next up was Tuesday's news that the Transportation Safety Administration (TSA) had awarded three companies -- L-3, American Science & Engineering
Super-size that contract
But the biggest news of this still-young week has to be the obscure mention by Reuters of a mammoth, $50 billion contract "to provide information technology services to federal agencies," which will be divvied up among "29 companies." Precisely what the contract is for, and who gets how much of it, has not yet been explained. But it sure sounds huge. So someone please tell me: Why is it, again, that L-3 is down 3% post-earnings? That news was so last week.
What did we expect out of L-3 last quarter, and what did we get? Find out in: