Amentum Stock Drops on Expected Winding Down of Government Programs

Key Takeaways

Amentum Holdings (

AMTM

) swung to a fourth-quarter profit but shares sank Tuesday when executives said in the company’s earnings call that they see fiscal 2025 growth being affected by an expected winding down of certain government programs.

The government technology provider reported fourth-quarter
earnings per share (EPS)
of $0.28, compared with a loss of $0.07 per share a year ago. Revenue rose 3.5% year-over-year to $2.21 billion. It affirmed its full-year guidance and added a fiscal 2025 adjusted EPS estimate of $2.00 to $2.20.

However,
Chief Financial Officer (CFO)
Travis Johnson said on the company’s earnings call that “Growth driven by new program awards … is expected to be partially offset by the wind down of certain historical programs,” according to a transcript provided by AlphaSense.

Amentum Recently Joined S&P 500 But Is Moving to SmallCap 600 Next Week

Amentum
joined
the
S&P 500 Index
on Sept. 30 after it was
spun off
from engineering and construction company Jacobs Solutions (

J

) following its merger with the latter’s Critical Mission Solutions and Cyber and Intelligence businesses. However, that was short-lived, as S&P Dow Jones Indices announced earlier this month that Amentum would be
removed
from the index and placed in the S&P SmallCap 600 Index, effective Dec. 23.

Since that spinoff, shares of Amentum Holdings have lost 28% of their value.

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