Engility Raises Full-Year Earnings Forecast on 2Q Beat

Engility Holdings (NYSE: EGL) lifted its full-year earnings outlook Monday in part on higher total contract bookings and bill-to-book ratio for the second quarter as the company continues on efforts to prioritize debt repayments.

Chantilly, Virginia-based government services contractor Engility said it expects earnings of $1.18-$1.33 per share for its fiscal year compared to the original $1.00-$1.15 outlook with revenue unchanged at $2.05 billion-$2.15 billion.

Second quarter earnings of 34 cents per share topped the consensus analyst outlook of 28 cents and revenue declined 6.96 year-over-year to $535.43 million but still beat Wall Street’s $524.55 million forecast.

Engility reported $632 million in bookings and a book-to-bill ratio of 1.2x in the second quarter versus the $396 million and 0.8x figures reported for the January-March period.

Total net debt fell to $1.06 billion as of the second quarter’s end on July 1 and repayments have totaled $30 million over six months, while Engility executives indicated in March to analysts that the company expects to pay down $70 million-$80 million for the full year.

Engility disclosed July 25 it is in the process of refinancing all of its debt and expanding its revolving credit line.

Net income fell 73.82 percent year-over-year to $4.05 million and earnings before interest, taxes, depreciation and amortization totaled $48.37 million with an EBITDA margin of 8.6 percent.

As of Friday’s close, shares in Engility have declined 10.75 percent since the start of the year and have risen 32.48 percent over 12 months.

By comparison, the GovCon Index has climbed 7.78 percent for 2016 so far and is up 9.78 percent in 52 weeks.

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