Susquehanna cuts Booz Allen's earnings estimate on Snowden leak

June 12 Wed Jun 12, 2013 3:25pm EDT

June 12 (Reuters) - U.S. intelligence agencies will likely freeze some of Booz Allen Hamilton Holding Corp's projects temporarily, pending a review of how the company handles classified information, Susquehanna Financial Group analysts said, trimming their earnings estimates for the company's fiscal 2014.

Booz Allen shares, majority owned by private equity firm Carlyle Group LP, were down 3.6 percent at $16.53 in late afternoon trading on the New York Stock Exchange on Wednesday.

Booz Allen, which generated 23 percent of its revenue from U.S. intelligence agencies in the financial year ended March 31, said on Sunday that one of its employees was responsible for leaking details of a top secret U.S. surveillance program.

Edward Snowden, a former technical assistant at the CIA, had been working for three months at the National Security Agency under a Booz Allen contract.

"Our conversations with agencies and vendors over the last few days reveal that a number of competitors are subtly incorporating this incident into their contract bids against Booz Allen," Susquehanna analysts led by James Friedman said in a note to clients.

The analysts cut their revenue estimate to $5.58 billion for the year ending March 31, 2014. They also cut their earnings estimate to $1.40 per share from $1.47, citing possibility of work stoppage pending the process review.

Analysts on average are expecting earnings of $1.56 per share on revenue of $5.65 billion, according to Thomson Reuters I/B/E/S.

The Susquehanna analysts reiterated their "negative" rating on the company.

Separately, Standard & Poor's Ratings Services on Wednesday maintained its "BB" corporate credit rating on Booz Allen, but warned that the company's future revenue could be hurt if it failed to maintain confidentiality and adequate protection against security breaches.

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