Parsons Updates Full-Year Guidance After Q2 Results; Carey Smith Touts Record Contract Wins, Complementary Portfolios

Parsons (NYSE: PSN) reported second quarter revenue of $879 million, a 10 percent decline from the same period in 2020 despite large contract wins for the April-June period.

The Centreville, Virginia-based contractor attributed a 56 percent decline in operating income for the quarter to reserves taken on federal solutions and critical infrastructure programs, a competitive labor market and contract delays.

“In the second quarter, we delivered record awards, generated strong free cash flow, and announced a significant acquisition that added attractive capabilities and met our strict M&A criteria, which demonstrates our ability to continue to deploy capital to generate long term shareholder value,” Carey Smith, president and CEO of Parsons and 2021 Wash100 Award recipient, said in an earnings statement.

The company secured a $2.2 billion contract to help the Missile Defense Agency engineer systems for defending U.S. and allied forces against various missile threats, and won a separate $953 million contract to build a layered base security system for U.S. Air Forces in Europe-Air Forces Africa.

In May, the General Services Administration awarded Parsons a $618 million task order to update cyber technologies for the intelligence community.

Operating cash flow increased to $104 million in the quarter from $88 million in the same period last year, and the company noted its completion of BlackHorse purchase would expand capabilities in the cyber, electronic warfare and information dominance areas.

Parsons lowered its full-year revenue outlook to a range of $3.6 billion-to-$3.7 billion from the prior $3.85 billion-$4.05 billion guidance.

The company said it now expects 2021 adjusted earnings before interest, taxes, depreciation and amortization in the $295 million-to-$315 million range versus the previous $350 million-to-$375 million outlook.

“Our differentiated and complementary defense and critical infrastructure portfolios are well aligned with the Biden administration’s priorities, and we remain excited about the future given the significant progress and tailwinds we are already seeing in the third quarter,” Smith added.