Science Applications International Corp(NYSE: SAIC) stock lost over 6.9% in the after-hours session on September 7th, 2017 due to lower than expected second quarter of 2018 performance. The lost over 14.6% in the last six months (as of September 7th, 2017; Source: Google finance). Revenues lost 2% yoy due to loss of an IT integration contract supporting the Department of Homeland Security (DHS) ($13 million), coupled with other net contract declines across their portfolio ($21 million). New information technology contracts supporting the U.S. Army and federal civilian agencies worth $30 million and better revenue on platform integration programs worth $11 million offset the overall pressure to a certain extent.
Operating income as a percentage of revenues fell to 5.5% of revenues, from 6.4% in pcp on the back of fall in contract profitability, decline in profitability on re-competed supply chain management contracts and higher severance and facility expense. Net income fell $1 million during the quarter.
On the other hand, the group’s Net bookings during the quarter were over $2.1 billion, which shows a book-to-bill ratio of over 2.0. Bookings mainly consisted of re-compete awards during the quarter. The group expects a backlog of signed business orders of over $9.2 billion during the quarter of which $1.8 billion was funded.
The group is expanding services to current customers, wherein National Aeronautics and Space Administration (NASA) gave an indefinite-delivery, indefinite-quantity (IDIQ) contract for multidiscipline engineering support services to the Goddard Space Flight Center in Greenbelt, Maryland. U.S. Navy – Space and Naval Warfare Systems Command (SPAWAR) gave a new IDIQ prime contract for Automated Digital Network System (ADNS). NASA gave two contracts for development, sustainment, and maintenance of IT software, systems, and support for the Flight Operations Directorate at NASA’s Johnson Space Center in Houston, Texas. Meanwhile, the group also won a National Institute of Mental Health gave a task order to the group to offer support to the full range of IT services, worth over $48 million, if all options are exercised.