Challenging contracting conditions hurt consultancy’s revenues

Sergey Nivens/Shutterstock.com

Consulting firm Booz Allen Hamilton reported a 3.5 percent decrease in revenues in the third quarter of its 2013 fiscal year, citing lower demand and challenging market conditions for government contractors.

The company reported revenues of $1.39 billion in the quarter ending Dec. 31, 2012, down from $1.44 billion during the same period in the previous year. Net income for the quarter was $56.2 million, down from $62.8 million the previous year. The company’s fiscal year begins in April and runs through March.  

Booz Allen Hamilton was focused on increasing productivity in the “uncertain federal budget environment,” said Chairman, CEO and President Ralph W. Shrader. “At every level in our company, we are making changes to ensure our cost competitiveness to win and perform work,” Shrader said in a statement.

Booz Allen’s statement said the company expected a “continuation of current macro-economic trends,” and was not including a possible impact from across-the-board federal spending cuts known as sequestration. But, in an email sent to staff on Wednesday, Shrader said that the “broader threat of sequestration” had been harder on the market than the company had anticipated. The potential cuts have now been delayed until March 1.

Not all government contractors reported gloomy financial conditions. Boeing Co. on Wednesday announced strong yearly earnings for 2012, but during a conference call warned of “uncertainty” in the U.S defense and government markets.  The company announced layoffs at a Texas facility earlier in January, citing Defense Department budget cuts. A spokesman told Government Executive that the company would like lawmakers to avoid sequestration, but is “making the changes necessary to compete and grow in this environment.”

Other government contractors including Lockheed Martin Corp. and Raytheon Co, have shrugged off the threat of sequestration in their 2013 forecasts. General Dynamics Corp., which announced a $2.1 billion loss in the fourth quarter of 2012, did not mention sequestration specifically, but did say that slower defense spending and lower market demand were eroding business conditions.

(Image via Sergey Nivens/Shutterstock.com)

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

    Download
  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

    Download
  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

    Download
  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

    Download
  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security

    Download

When you download a report, your information may be shared with the underwriters of that document.