SAIC Shows Strength with New Revenue Outlook
Science Applications International (NASDAQ: SAIC) recently reported its fiscal quarterly earnings, revealing important updates that have positively affected its stock performance. Despite a revenue drop, the company adjusted its annual forecast upwards, showcasing resilience in a challenging environment.
Quarterly Performance Review
In its latest financial report, SAIC experienced a 6% decline in quarterly sales compared to the previous year, reaching $1.87 billion. This figure fell short of the analyst consensus estimate, which anticipated $1.89 billion. On the other hand, the adjusted earnings per share (EPS) of $2.58 exceeded expectations which were set at $2.15.
Financial Highlights
During this quarter, SAIC's operating income witnessed a significant drop of 20%, totaling $128 million. The operating margin also saw a decline of 120 basis points, now at 6.9%. However, with adjusted operating income reported at $183 million, the margin improved to 9.8%. Moreover, adjusted EBITDA fell 6% to $185 million, representing a margin of 9.9%.
Bookings and Cash Flow Insights
The company secured net bookings of approximately $2.2 billion, translating to a solid book-to-bill ratio of 1.2. Operating cash flow reached a total of $129 million, with free cash flow reported at $135 million. Notably, SAIC's estimated backlog for the quarter stood at around $23.8 billion, including $3.8 billion that is funded.
Current Liquidity Position
As of late October, the company maintained $45 million in cash and equivalents. Furthermore, SAIC's Board of Directors declared a cash dividend of $0.37 per share, offering returns to its shareholders during this transitional period.
Assessing Revenue Projections
Science Applications has revised its revenue outlook for the fiscal year 2026 to a range of $7.275 billion to $7.325 billion, a slight adjustment from the previous estimate of $7.250 billion to $7.325 billion. This new forecast aligns closely with the analyst consensus estimate, indicating strategic planning amidst fluctuating market conditions.
Adjusted Earnings Forecast
Moreover, the company has raised its adjusted EPS outlook to between $9.80 and $10.00, improving from the previous forecast of $9.40-$9.60 and surpassing the consensus estimate of $9.55. In terms of financial health, SAIC has also lifted its projected adjusted EBITDA to between $695 million, while maintaining a free cash flow outlook exceeding $550 million.
Trading Dynamics and Market Response
Following the announcements, SAIC saw its shares rise by 5.68%, trading at $92.50 in early market sessions. This rebound reflects investor confidence in SAIC's ongoing efforts to adapt and respond to the market's challenges.
Frequently Asked Questions
What were the recent quarterly earnings of SAIC?
SAIC reported quarterly sales of $1.87 billion, reflecting a 6% decline compared to the previous year.
How did SAIC’s adjusted EPS perform?
The adjusted EPS reached $2.58, outperforming the analyst consensus estimate of $2.15.
What is SAIC’s new revenue outlook for 2026?
The company revised its revenue outlook to between $7.275 billion and $7.325 billion for fiscal year 2026.
What are the current cash reserves of SAIC?
As of October 31, SAIC held approximately $45 million in cash and equivalents.
What dividend has SAIC declared?
SAIC's Board of Directors declared a cash dividend of $0.37 per share for its shareholders.
