SAIC Relying on the Government

SAIC is one of the largest defense contractors in the U.S. Yesterday it announced its third-quarter results. The San Diego Union-Tribune states that earnings were up by 14 percent mainly due to government contracts. The commercial part of their business showed little or no growth. Like many other in the industry SAIC is taking the hold over of Secretary Gates as a positive sign for defense spending. There is hope that with President Obama continuing to use some of the former administration's people that the defense budget will not see serious cuts for a few years. If the new leadership does start winding down the U.S. commitment to Iraq and Afghanistan and the current economic issues continue then there will probably be downward pressure on defense spending in the next few years. The budget has always gone in boom-and-bust cycles in the past.