SAIC CEO to retire next year, shares down
Oct 3, 2011, 10:06 a.m.
(Reuters) - SAIC Inc
CEO Walt Havenstein, who joined SAIC in September 2009 and previously worked for BAE Systems Plc
The government services contractor said its board would consider internal and external candidates in the search for a successor.
Erik Olbeter, an analyst with Pacific Crest Securities, said news of the coming departure was likely no surprise given the challenges SAIC faces.
"The firm really needs some changes in their strategy now and with the current CEO now scheduled to stay on for nine months, it makes it difficult for the firm to make any significant strategic directional change," Olbeter said on Monday.
"So as such, it's a funny decision by the board which sort of raises questions as to whether or not SAIC can really change its fortunes over the next nine months."
Results at SAIC have been held back by U.S. government delays in funding contracts and a tougher defense budget outlook. Its shares have fallen to all-time lows. On Monday the shares were 2 percent to $11.57, below a 12-month low of $11.78 on September 30.
In late August, SAIC lowered its outlook for the fiscal year that ends in January, citing continued troubles in converting new contracts into revenue. SAIC gets 97 percent of its revenue from government sources.
The company was also involved in a New York City automation timekeeping project that has been plagued by fraud charges.
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