Earnings Review and Free Research Report: Science Applications International’s EPS Soared 52%

LONDON, UK / ACCESSWIRE / June 29, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Science Applications International Corp. (NYSE: SAIC), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=SAIC, following the Company’s disclosure of its first quarter fiscal 2017 earnings results on June 13, 2017. The information technology Company surpassed earnings expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at: http://protraderdaily.com/register/.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on SAIC. With the links below you can directly download the report of your stock of interest free of charge at: http://protraderdaily.com/optin/?symbol=SAIC.

Earnings Reviewed

For the first three months ended May 05, 2017, SAIC’s sales decreased 9.22% to $1.10 billion from $1.21 billion in Q1 2016. The decrease was due to one additional week in the prior year’s same quarter and the increased costs and investment on its platform integration programs. The Company’s revenue numbers came in below analysts’ expectations of $1.12 billion.

During Q1 2017, SAIC’s gross profit margin was 8.7%, down 0.9% from Q1 2016. The operating margin for the reported quarter was 5.7% compared to 5.4% in Q1 2016 primarily due to platform integration program impacts, offset by the reduction in estimated lease exit costs.

SAIC’s net income for Q1 2017 was $49 million up by 48.5% compared to $33 million in Q1 2016 due to lower income tax expense as a result of the adoption of the new accounting standard for excess tax benefits from stock-based compensation. The diluted earnings per share for the reported quarter were $1.08 compared to $0.71 for the prior year’s corresponding quarter. Earnings came in ahead of Wall Street’s expectations of $1.04 per share.

For the reported quarter, the Company’s adjusted EBITDA was $73 million, or 6.6% of revenue, compared to 7.1% for Q1 2016. EBITDA was impacted by higher net unfavorable contract estimates of $11 million, which included $9 million on its platform integration programs.

New Business Awards

SAIC’s net bookings for Q1 2017 were approximately $1.3 billion, which reflects a book-to-bill ratio of approximately 1.2. SAIC’s estimated backlog of signed business orders at the end of the quarter was approximately $8.2 billion of which $1.8 billion was funded.

Balance Sheet

As on May 05, 2017 SAIC’s cash and cash equivalents were $207 million above its average operating cash balance target of $150 million. The Company had total debt of $1.01 billion, equating to a bank EBITDA leverage ratio of less than 3x for the reported quarter.

For the reported quarter, operating cash flow increased to $88 million a 151.4% increase from $35 million in Q1 2016. The increase was primarily due to payments for an extra week of payroll in the prior year’s same quarter, excess tax benefits for stock based compensation in the current year’s same quarter, and the prior year’s working capital investments in Marine Corps platform integration and IT services programs.

During Q1 2017, SAIC deployed $61 million of capital, consisting of $38 million in plan share repurchases under SAIC’s previously announced share repurchase program, $14 million in cash dividends, and $9 million for a voluntary debt prepayment.

Subsequent to quarter-end, SAIC’s Board of Directors declared a cash dividend of $0.31 per share of the Company’s common stock payable on July 28, 2017, to stockholders of record on July 14, 2017.

Outlook

SAIC expects full year profitability, as measured by EBITDA margin, to be 10 basis points lower than the prior year due to the impact of the platform integration programs.

For fiscal 2018 year, the Company expects $240 million of free cash flow nearly $20 million more than the previous estimate of $220 million. It expects to pay dividends of $55 million, make total debt payments of approximately $25 million, with the remainder of cash in excess of $150 million available for further share repurchase and strategic M&A.

Stock Performance

At the close of trading session on Wednesday, June 28, 2017, Science Applications’ stock price rose 2.11% to end the day at $70.64. A total volume of 211.65 thousand shares were exchanged during the session. The Company’s share price has surged 27.95% in the past twelve months. Shares of the Company have a PE ratio of 19.67 and have a dividend yield of 1.76%. The stock currently has a market cap of $3.08 billion.

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