SAIC Q4 Adj. Profit Tops View, But Revenues Miss

(RTTNews) - Science Applications International Corp. (SAIC), a technology integrator providing full life cycle services and solutions in the technical, engineering, intelligence, and enterprise information technology markets, reported that its net income for the fourth-quarter declined to $28 million or $0.60 per share from last year's $36 million or $0.75 per share, due to increased interest expense on incremental term loan borrowings and decreased operating income.

Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates.

"SAIC executed well in the fourth quarter and throughout fiscal year 2016, while building momentum moving into fiscal 2017," said Tony Moraco, SAIC Chief Executive Officer.

Adjusted earnings per share for the quarter decreased to $0.74 from $0.75 in the previous year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.61 per share for the quarter. Analysts' estimates typically exclude special items.

Operating income for the quarter was $54 million down from $59 million in the prior year quarter. The decrease in operating income was primarily driven by higher current year amortization of intangible assets due to the Scitor acquisition ($10 million) and Scitor integration costs ($10 million). These were partially offset by operating income generated by Scitor during the quarter and a net favorable increase in the change in estimates on contracts accounted for under the percentage-of-completion method. Operating income as a percentage of revenues was 6.0% for the quarter after adjusting for acquisition and integration costs.

Revenues for the fourth quarter grew to $1.068 billion from $941 million during the prior year quarter, which equates to revenue growth of 13%. The increase was primarily due to acquired contracts from the Scitor acquisition and newly awarded programs. These increases were partially offset by lower material volume on supply chain contracts.

Total revenues for the quarter rose to $1.071 billion from $952 million last year. Wall Street expected revenues of $1.08 billion.

Subsequent to quarter end, the Board of Directors declared a regular quarterly cash dividend of $0.31 per share payable on April 29, 2016 to stockholders of record on April 15, 2016.

Net bookings for the quarter were approximately $0.9 billion, which reflects a book-to-bill ratio of approximately 0.8.