Anyone who has ever been a technical contractor knows that working for federal government clients can be particularly demanding. When you get the hang of it, though, it's good steady work. On the IT side, there is an outfit in Arlington, Virginia that really knows the ropes. It ranks high on the list of leading defense contractors.

CACI International (NYSE: CAI) provides a wide range of information technology and communications solutions, primarily to U.S. government clients. Systems integration, network management, engineering, simulation, and information assurance services are offered in support of client communications, system security, data collection and analysis. The firm also provides market analysis software, debt management services and litigation support. CACI International employs about 10,500 people worldwide.

The firm pleased investors last week, when it reported fiscal Q4 EPS of 67 cents and revenues of $520.4 million. Analysts had been expecting 63 cents and $479.2 million. The CEO noted, "During the quarter, we won all of our major recompetes and won significant new business across the federal government." Management also guided FY08 EPS to $2.50-2.80 ($2.68 consensus) and FY08 revenues to $2.05-2.15 billion ($2.09B consensus). JP Morgan subsequently upgraded the shares from "underweight" to "overweight".

MOST NOTEWORTHY: CACI International Inc (CAI), SAIC, Inc (SAI), CenturyTel, Inc (CTL), Honda Motor Co (HMC) and Micron Technology, Inc (MU) were today's noteworthy downgrades:

• Morgan Stanley downgraded CACI International (NYSE: CAI) and SAIC Inc (NYSE: SAI) to Underweight from Equal Weight to reflect concerns over an increasingly unfavorable political environment as the risk of reduced funding for federal IT initiatives grows.

• Soleil downgraded shares of CenturyTel (NYSE: CTL) to Sell from Hold on valuation and a possibly active hurricane season.

• Honda Motor Co (NYSE: HMC) was cut to Neutral from Buy at Merrill Lynch.

• Micron Technology (NYSE: MU) was downgraded to Sell from Neutral at Goldman Sachs as the firm believes improvements in DRAM pricing will be short lived and that the company will continue to generate losses given its poor cost structure.

OTHER DOWNGRADES:

• CSX Corp (NYSE: CSX) was downgraded to Reduce from Neutral at Calyon on valuation and deteriorating volume.

• Rockwell Automation (NYSE: ROK) was cut to Neutral from Overweight at JP Morgan.

• Inverness Medical Innovations, Inc (AMEX: IMA) was downgraded to Hold from Buy at Stifel.

• WebSideStory, Inc (NASDAQ: WSSI) was downgraded to Sector Perform from Outperform at RBC, citing short-term execution risks.

• Jefferies downgraded Cerner Corp (NASDAQ: CERN) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).