The nation's top defense contractors will bid for slices of a smaller pie, and several will suffer from major program cancellations under the fiscal year 2012 budget proposed by President Barack Obama this week, analysts said Tuesday.
Obama's proposed defense budget would reduce overall military spending by 5% in the year beginning Oct. 1, as the Pentagon pulls back troops from Iraq and Afghanistan, Morgan Keegan & Co. Inc. analysts Brian Ruttenbur and Peter Kostiuk said in a research note. Budgets for procurement, research and development, which have the most direct impact on top defense players, would be pared by 0.4% for the year, the analysts said. Those companies also will suffer from Obama's requests to cancel or scale back a number of costly, high-profile programs.