Defense and IT specialty company QinetiQ (London: QQ, OTC: QNTQY, QNTQF) just released its numbers for fiscal-year 2010. No one was surprised that they weren’t very good.

Much of its losses came from reorganizing operations in its EMEA (Europe, Middle East, Australasia) division. Europe is having a tough go of it, and some of the company’s work in Iraq has ended. Most of the reorganization costs were one-time charges, so they’ve swallowed one bitter pill that will help them move forward.

But the firm’s 2010 results did contain some good news. The QinetiQ North America (QNA) division grew briskly. And this was the main reason to buy the stock. The US is the largest military in the world; North America is a key growth market. And Australia is one of the few English-speaking countries that actually increased its military spending for the coming year and QinetiQ has ensconced itself in that market during the past few years.

The stock has taken a beating as investors worried if QinetiQ’s management would actually do something about the company’s plight. They’ve decided to act.

The board agreed to suspend the dividend for the next year or two until its European business stabilizes and the company completes its reorganization strategy. Management indicated that the company’s new structure will comprise three divisions: US Services, UK Services and Global Products.

The news was bad, but the stock is up about 12 percent today–an indication that the market likes the changes. If you don’t own the stock, this is a good entry point; if you do, this is a good time to average down. I’m still not completely convinced QinetiQ is out of the woods, but things look better than they have over the past couple of quarters. I’ll be keeping a close eye on the company; as long as the QNA division does brisk business, the company should come back strong.