Ahead of the Bell: Booz Allen

Susquehanna cuts profit estimate for Booz Allen following security breach

Associated Press

NEW YORK (AP) -- Susquehanna Financial Group cut its earnings estimates for Booz Allen after an employee leaked data about top-secret U.S. surveillance programs to newspapers.

Analyst James Friedman Friedman believes that there will be a temporary work stoppage on Booz Allen National Security Agency projects at the very least, pending a review of how it handles sensitive information.

Booz Allen gets about 23 percent of its revenue from U.S. intelligence agencies, Friedman said, a figure that is even bigger if you include intelligence services that the company provides to defense contractors employed by the government.

Edward Snowden, a former Booz Allen employee, has admitted in interviews with two newspapers that he released confidential data bout sweeping surveillance programs by U.S., saying that he wanted to reveal what the U.S was doing.

He was fired Tuesday by Booz Allen and has since gone into hiding. Snowden was last seen in Hong Kong.

Friedman to cut his fiscal 2014 profit prediction by 7 cents to $1.40 per share. Analysts, on average, expect a profit of $1.56 per share, according to FactSet.

Friedman said that it appears that some of the company's competitors are already incorporating the incident into their contract bids against Booz Allen, emphasizing their own oversight systems and security policies.

Shares of Booz Allen Hamilton Holding Corp. have fallen 2 percent this week and closed Tuesday at $17.14.

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