Even as it reported declining profit in the third quarter, Colorado Springs-based defense contractor Vectrus Inc. raised its revenue and earnings forecasts for the year after winning a $400 million subcontract to provide support to Air Force flight and air defense system test ranges.
Vectrus announced that it won a subcontract to Los Angeles-based construction giant AECOM's $3.6 billion contract to provide range support service through 2034 to the Air Force at the Nevada Test and Training Range, Creech Air Force Base and Tonopah Test Range Airfield, all in Nevada.
The subcontract, the largest the company has won this year, will generate $20 million in annual revenue for Vectrus and helped push its backlog of contracts to a record $3.1 billion, CEO Chuck Prow said Tuesday in a news release.
The subcontract "is expected to increase our U.S. based facilities and logistics work with the Air Force. It is a notable win for our team," Prow said. "We remain focused on future growth and our efforts so far in 2017 have resulted in over $1.3 billion of contract bookings."
With that and other contract wins, Vectrus boosted its revenue forecast for the year by about $50 million and its profit forecast by $1.6 million, using the midpoint of the range of its previous and update forecasts.
The company now expects revenue of $1.08 billion to $1.1 billion and earnings of $21.1 million, or $1.87 a share, and $23 million, or $2.03 a share. Vectrus also raised its 2017 financial forecast, first issued when it reported its fourth-quarter and 2016 financial results, during the first quarter.
Vectrus has bid on contracts totaling $400 million and expects to bid on another $6 billion in work over the next 12 months, Prow told stock analysts Tuesday during a conference call.
That doesn't include the $82 billion Logistics Civil Augmentation Program V contract expected to be made in mid-2018 to up to six bidders. They will compete for individual task orders for a wide array of support and logistics services for deployed troops in contingency operations worldwide. That contract will include what is now the company's largest contract.
The company also reported that its third-quarter earnings fell 12.2 percent from the same period last year, from $6.61 million, or 60 cents a share, to $5.8 million, or 51 cents a share. Revenue during the same period declined 5 percent to $269.6 million.
Revenue and earnings easily beat forecasts by the two analysts who follow Vectrus. Profits for the first nine months of the year dropped 6.8 percent from a year earlier to $17.9 million, or $1.61 a share, from $19.2 million, or $1.76 a share.
Revenue during the period was off 9.2 percent from a year ago to $819 million.
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