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CACI Revises Fiscal 2014 Outlook

Zacks Equity Research

Technical service provider CACI International Inc. (CACI) recently provided a tepid outlook for 2014 and revised its fiscal guidance downward, primarily due to reduced government spending and delays in contract awards.

CACI trimmed its revenue outlook for fiscal 2014 to a range of $3.5 billion and $3.6 billion from $3.6 billion–$3.8 billion. The lower fiscal 2014 guidance reflects delays in contract awards for new business, lower run-rates on professional services contracts and reductions in Afghanistan-related material purchases.
The company revised its net income outlook for fiscal 2014 to a range of $130–$140 million from $142–$152 million expected earlier. The fiscal earnings guidance was lowered to $5.12–$5.51 per share from the previous range of $5.59–$5.98. However, fourth quarter net income is expected to be higher sequentially driven by higher award fees, greater contributions by Six3 Systems, increased volume of high margin product sales, modestly higher direct labor and lower interest expenses.

Nevertheless, CACI intends to expand in new markets, increase new business developments, drive operational excellence and continue with its acquisitions. Furthermore, the company is looking forward to the progress of its integration of Six3 Systems to increase its market share and create long-term value for its shareholders.

With the Six 3 system  acquisition, CACI  is likely to expand its customer base and strengthen its presence in high-growth Cyberspace market as well as build on its capabilities in the high-volume command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) markets.

Based in Arlington, Va, CACI delivers IT applications and infrastructure to improve communications and secure the integrity of information systems and networks; enhance data collection and analysis; and increase efficiency and mission effectiveness.

CACI currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth considering in the industry include Ebix Inc. (EBIX), Ciber, Inc. (CBR) and Computer Science Corporation (CSC), each carrying a Zacks Rank #2 (Buy).

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