Vectrus Says Army to Re-Open Bids for Kuwait Logistics Contract, Narrows Earnings Guidance With Revenue Outlook Lift
GovCon Index-listed Vectrus (NYSE: VEC) said Tuesday the U.S. Army will seek revised proposals for a recompeted logistics contract the company originally was not selected for in late September as the program’s current iteration represents the largest the contractor’s portfolio.
Vectrus added it is also awaiting a Government Accountability Office decision on a separate recompeted Army logistics contract the company lost in early September as both programs represented close to half of the company’s revenue over nine months this year.
Colorado Springs-based Vectrus filed a protest Oct. 11 against the Kuwait Base Operations and Security Support Services 2.0 recompete award on Sept. 29 to a joint venture of KBR (NYSE: KBR) and Triple Canopy.
K-BOSSS contributed $323 million in revenue to the Colorado Springs-based government services contractor over nine months to represent approximately 35.9 percent of total sales as of Sept. 30 and is scheduled to run through Dec. 28, 2016 with an option to extend to March 28, 2017.
Vectrus expects GAO to issue a decision by Dec. 22 on the Army Pre-Positioned Stocks-5 contract awarded to an AECOM (NYSE: ACM) business unit in early September for work in Kuwait and Qatar.
The Army awarded the recompeted APS-5 contract as a combination of separate predecessor contracts for maintenance and supply services in Kuwait and Qatar.
APS-5 Kuwait contributed $134 million in revenue to Vectrus through Sept. 30 to represent 14.6 percent of total sales over nine months and the company received a four-month, $46 million extension on Oct. 26 to extend work through Feb. 28, 2017.
Vectrus also narrowed full-year earnings guidance to $2.12-$2.28 per share from the prior $2.07-$2.32 EPS range on expected fourth quarter severance charges related to the reduction of 64 positions at the Colorado Springs headquarters in addition to 18 open or unfilled posts eliminated in the year so far.
The company also lifted revenue guidance to $1.19 billion-$1.2 billion from the prior $1.18 billion-$1.2 billion range.
Third quarter earnings came in at $0.60 to exceed Wall Street’s consensus forecast of $0.55 and net income fell 52.9 percent from the prior year period to $6.61 million.
Revenue declined 5.12 percent to $283.78 million on decreases in Afghanistan-, U.S.- and Europe-based programs.
Analysts expected Vectrus to report $294.25 million in third quarter sales.
As of Tuesday’s close, shares in Vectrus have fallen 21.25 percent since the start of the year and are down 34.77 percent over 12 months.
The GovCon Index has added 5.93 percent on a year-to-date basis and is up 2.34 percent for 52 weeks.