SM&A to Miss Estimate

SM&A(WINS) said fourth-quarter earnings will miss analyst estimates as a customer's budget pressures hurt revenue.

The company, which manages business proposals, expects to earn 4 cents a share in the quarter on revenue of $16.5 million. Analysts surveyed by Thomson First Call were expecting earnings of 10 cents a share on revenue of $19.7 million.

The company earned 13 cents a share on revenue of $18.2 million a year ago.

"As we noted during our conference call on Oct. 13, we entered the fourth quarter with the potential for revenue shortfall resulting from a client who is experiencing budget pressure on one of their programs. This budget pressure continued throughout the quarter and impacted our ability to continue to service the client at the levels maintained during the first nine months of the year.

"In October, we felt there was an opportunity to offset this revenue pressure with additional competition management contracts in our pipeline," SM&A said. "However a number of procurement delays late in the quarter affected our ability to overcome the revenue pressure. In addition, our loss of focus on building our performance assurance business, and the resulting insufficient pipeline from this service line, contributed to the revenue short fall."

SM&A said it expects 2006 to be a year of "single-digit growth," with revenue for the first half of 2006 below the first half of 2005. The second half should generate "favorable comparisons," it said.

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