Industry Week in Review – September 28, 2012
In its last act before adjourning last weekend, the Senate approved a continuing resolution which funds the federal government for the next six months, maintains defense funding at 2012 levels, and approves war funding at the Pentagon’s 2013 requested level.
While this measure does avert a government shutdown, it still poses some challenges for the Department of Defense. Pentagon Comptroller Robert Hale described the resolution as problematic due to the fact that it fails to authorize certain types of spending such as the assistance mission in Iraq or aircraft carrier overhaul projects. Hale noted that the Pentagon would rely on temporary “work-arounds” to continue funding programs through December, but pointed out that its authority to do so diminishes significantly come January. While the comptroller does not foresee mass contract cancellations on January 2nd as a result of either the stop-gap spending bill or of sequestration, he did comment that the DoD may not be able to pick up new contract options, launch new programs, or increase production rates on existing programs.
QinetiQ Group plc (Up 9.5%) – Shares were up for the week after the company issued a business update ahead of its investor day in Farnborough, UK on September 26th. It reported that the company’s performance during the first half of the fiscal year was stronger than originally expected, with its Global Products and UK Services groups both performing well.
Wesco Aircraft Holdings (Down 8.6%) – Shares were down for the week after the company announced the pricing of a secondary offering of shares by certain employees and former employees at $13.65 a share.
No relevant transactions for the week