SM&A Warns of Revenue Shortfall

The consulting company blames the war in Iraq for a weak second half.
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warned late Monday of a sharp revenue shortfall that the company blamed on the war in Iraq.

The Newport Beach, Calif., proposal development concern forecast third-quarter revenue of $15 million and full-year revenue of around $67.5 million. Those figures are far short of the Wall Street consensus estimate: The Thomson First Call analyst consensus calls for third-quarter revenue of $21.6 million and fiscal 2004 revenue of $82 million.

"It has been a very unusual year for us, as this is the first time in our 22-year history that the federal government has funded a prolonged military action leading to both

requests for proposals and program delays," said CEO Steven Myers. "In 2004, we have experienced more delays than we have experienced in the past several years. While our short-term performance has been affected by events in which we have no direct control, such as the prolonged military action and the upcoming presidential election, our long-term prospects are strong."

The company expects to post third-quarter numbers after the market closes Oct. 18. On Monday, SM&A slipped 4 cents to $8.25.