CACI International reported relatively modest third quarter fiscal
2014 results with adjusted earnings well exceeding the Zacks
Consensus Estimate, although GAAP earnings and revenues decreased
year over year. The company remains focused on its strategy to grow
in large markets, introduce new business initiatives, and leverage
on mergers and acquisitions to further increase its market share.
The company also expects to diligently focus on its operating plans
to reward its shareholders with attractive risk-adjusted returns.
However, stiff competition and regulatory pressure remain possible
headwinds for the company. We are changing our long-term
recommendation for the stock from Outperform to Neutral as we
expect it to perform in line with the broader market.
Based in Arlington, Virginia, CACI International delivers IT
applications and infrastructure to improve communications and
secure the integrity of information systems and networks, enhance
data collection and analysis, and increase efficiency and mission
effectiveness. The company's solutions enhance defense and
intelligence capabilities, assure homeland security, improve
decision-making, and help customers operate smartly and
The company primarily operates in two segments:
Domestic operations- The operations are channeled through
subsidiaries and a joint venture in which CACI has a controlling
stake. The services offered are categorized as Enterprise IT and
Network Services Data, Information and Knowledge Management
Services Business System Solutions, Logistics and Material
Readiness Services Command, Control, Communications, Computers,
Intelligence, Surveillance and Reconnaissance (C4ISR) Integration
Services Cyber Security, Integrated Security and Intelligence
Solutions and Program Management and System Engineering and
Technical Assistance (SETA) Services.
International Operations- The operations are carried out through
its subsidiary in Europe. International segment's solutions support
commercial and government clients in telecommunications, education,
financial services, healthcare services and transportation sectors.
It furnishes solutions to specific technical or business
requirement by planning, designing, implementing and managing
The company earns its revenues through four customer groups:
Department of Defense (DoD), Federal Civilian Agencies, Commercial
and Other, and State and Local Governments. DoD customers include
the U.S. Army (CACI's largest customer) and the U.S. Navy. The
company offers solution that supports combat operations and
concentrates on affirming readiness, tactical military intelligence
and communications. It safeguards the U.S. Navy fleet by automatic
identification technologies and mine countermeasure program.
Federal civilian agencies cater litigation support services to
Department of Justice (DoJ).
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