future US defence spending may largely depend on the upcoming budget from the Bush administration. Since it is clear that President Bush will tighten the reins on spending in the next budget defense companys share value may have peaked. Hopefully, the only decrease in defense spending will be from the money saved bringing soldiers home as they downsize the military presence in Iraq.
If your estimate is correct that PSP needs 8 million in revenue per qrtr to make a profit then the order book will dry up faster than an Iraqi marshland with Saddam Hussein at the helm.