Over the past week, U.S. Congress did not reach a deal on the sweeping Federal spending cuts known as sequestration. The $85 billion in spending cuts will target everything, from defense to education (but leave major drivers of debt such as Medicare and Medicaid untouched), over the next decade. Within the coming days, the White House is expected to alert agencies that their budgets have been cut, while agencies are expected to notify employees, contractors, and states that spending will contract for at least the next seven months. Attention turns to another budget deadline on March 27th, when the Continuing Resolution is set to expire and a partial government shutdown is possible. The question still remains if political leaders will reach a comprehensive deficit-cutting deal that solves the nation’s long-term debt problems.
The Senate confirmed Senator Chuck Hagel as U.S. Defense Secretary after escaping a filibuster from the Republican Party. The 58-to-41 vote was the smallest margin for a defense secretary since the creation of the position in 1947. Hagel was also the only nominee for the position to face a filibuster. In his first address as defense secretary, Hagel addressed the Pentagon’s budgetary concerns in the coming years and the need to protect the Department of Defense’s workforce. Hagel will succeed Defense Secretary Leon Panetta and join Obama’s retooled national security team.
CPI Aerostructures (Down 11.1%) – shares were down after the Company announced preliminary, unaudited 2012 revenue of approximately $89.6 million and EPS of about $1.42. Analysts were expecting revenue of $92.4 million and EPS of $1.47. CPI will announce audited 2012 results on March 12th.
NCI (Down 11.5%) – shares were down after the Company reported 2012 EPS excluding impairment charges of $0.51 on revenue of $368.4 million, down from 2011 EPS excluding impairment charges of $1.09 on $558.3 million of revenue. NCI also issued guidance for 2013 of revenue between $280 and $320 million and EPS between $0.14 and $0.26.
The Boeing Company acquired the Acalis Business of CPU Technology, Inc., a provider of firmware used to detect and protect against cyber-attacks for any platform on which it is integrated. Specifically, the firmware is used in the Joint Strike Fighter, but can be added to a host of applications. Terms of the deal were not disclosed.