SAIC 2Q Earnings Top Street on Integration Cost Decline, Revenue Flat

SAIC logoScience Applications International Corp. (NYSE: SAIC) reported second quarter earnings above analyst forecasts before markets opened Thursday with a year-over-year increase to net income in part on lower acquisition and integration costs.

GovCon Index-listed SAIC said earnings for the quarter ended Aug. 5, 2016 came in at 85 cents per share versus Wall Street’s expectation of 79 cents EPS with net income up 68.18 percent from the prior year period to $37 million.

Costs related to McLean, Virginia-based SAIC’s $790 million purchase of Scitor in 2015 fell from $12 million to $3 million year-over-year, while the company also reported a lower effective tax rate and declines in employee-related expenses versus the same period in 2015.

Revenue held flat at $1.09 billion versus the $1.11 billion analysts expected SAIC to report on reductions in supply chain material volume and scheduled decline in activity for the Marine Corps Amphibious Assault Vehicle program as the prototyping phase concludes.

SAIC said those declines were offset by new work in the USMC Amphibious Combat Vehicle program,  as well as the Federal Aviation Administration controller training and General Services Administration enterprise operations contracts.

The company also reported a book-to-bill ratio of 1.2 at $1.3 billion in net bookings.

Earnings before interest, tax, debt and amortization rose 17.14 percent to $82 million and EBITDA margin climbed from 6.4 to 7.5 percent.

Long-term debt fell to $984 million from the $1.01 billion reported in the fiscal 2015 second quarter.

As of Wednesday’s close, shares in SAIC have climbed 43.51 percent since the start of the year and 55.1 percent over 12 months.

By comparison, the GovCon Index has risen 8.52 percent year-to-date and 11.02 percent for 52 weeks.

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