Post Earnings Coverage as SAIC’s Quarterly EPS Surged 32%

Upcoming AWS Coverage on ServiceNow

LONDON, UK / ACCESSWIRE / April 12, 2017 / Active Wall St. announces its post-earnings coverage on Science Applications International Corp. (NYSE: SAIC). The Company reported its fourth quarter and fiscal 2017 financial results on March 30, 2017. The information technology Company reported its strongest annual book-to-bill ratio. Register with us now for your free membership at:

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One of Science Applications International’s competitors within the Information Technology Services space, ServiceNow, Inc. (NYSE: NOW), is estimated to report earnings on April 19, 2017. AWS will be initiating a research report on ServiceNow following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on SAIC; touching on NOW. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended February 03, 2017, SAIC’s revenues decreased 4% to $1.03 billion compared to the prior year revenue of $1.07 billion primarily due to lower subcontractor activity within the Company’s AMCOM contract portfolio, the re-compete loss of an IT integration program for the Department of Homeland Security, customer driven delays on a Marine Corp IT services program, various other decreases across its contract portfolio, and one less productive day in the reported quarter. These decreases were partially offset by revenues on newly awarded programs including the Amphibious Combat Vehicle (ACV) and GSA Enterprise Operations programs. The Company’s revenue numbers was below market estimates of $1.09 billion. For FY17, SAIC’s revenues increased $135 million, or 3%, to $4.45 billion compared to the prior year’s revenue of $4.32 billion.

For Q4 FY17, SAIC’s operating income increased $7 million to 5.9% of revenues, up from 5.0% for the prior year’s comparable quarter. This increase was primarily due to lower acquisition and integration expenses, lower intangible asset amortization and cost savings initiatives. SAIC’s EBITDA for the reported quarter increased to 7.1% of revenues compared to EBITDA of 6.8% for the comparable prior year’s corresponding quarter. The increase was primarily due to lower acquisition and integration expenses and cost savings initiatives, partially offset by higher B&P activity and lease exit costs.

SAIC’s net income for Q4 FY17 surged 29% to $36 million compared to $28 million in Q4 FY16 primarily due to increased operating income, lower effective tax rate, higher other income, and lower interest expense primarily due to lower principal outstanding. On per share basis, the Company’s earnings advanced 32% to $0.79 compared to $0.60 in the year earlier quarter. The Company earnings results fell short of analysts’ consensus of $0.80 per share.

For FY17, SAIC’s net income increased 26% to $148 million compared to prior fiscal year’s net income of $117 million, primarily due to increased operating income and a lower effective tax rate, and partially offset by increased interest expense primarily due to one additional quarter of interest in the current year on additional borrowings.

Cash Generation and Capital Deployment

SAIC’s total cash flows provided by operating activities for Q4 FY17 was $62 million, which represented a decrease from the comparable prior year’s same quarter. This decrease was primarily due to one more payroll payment in the current quarter and a net increase in working capital investments in Marine Corps platform integration and IT services programs ($7 million).

During the reported quarter, SAIC deployed $51 million of capital, consisting of $13 million in cash dividends and $38 million in plan share repurchases under SAIC’s previously announced share repurchase program. For the year, cash dividends were $54 million and share repurchases totaled $149 million of approximately 2.4 million shares, with total share repurchases since the inception of the program in 2013 totaling $349 million, or approximately 7.1 million shares.

Quarterly Dividend

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

New Business Awards

During Q4 FY17, SAIC’s net bookings were approximately $0.8 billion, which reflects a book-to-bill ratio of approximately 0.8. Net bookings for the year were approximately $5.3 billion, which reflects a book-to-bill ratio of approximately 1.2, the Company’s strongest annual book to bill to date. SAIC’s estimated backlog of signed business orders at the end of FY17 was approximately $8.0 billion of which $1.8 billion was funded.

Stock Performance

At the close of trading session Tuesday, April 11, 2017, Science Applications International’s share price finished yesterday’s trading session at $72.91, slightly up 0.50%. A total volume of 315.60 thousand shares exchanged hands. The stock has advanced 4.86% and 42.82% in the last six months and past twelve months, respectively. The stock is trading at a PE ratio of 22.61 and has a dividend yield of 1.70%. At Tuesday’s closing price, the stock’s net capitalization stands at $3.17 billion.

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