Science Applications International Corp (NYSE: SAIC) stock rose 12.1% on 7th December 2018 (As of 10:03 am GMT-5; Source: Google finance) after the company posted better than expected results for the third quarter of FY 19. Net income for the quarter increased $5 million as compared to the same period in the prior year due to a lower effective tax rate, partially offset by expenses associated with the debt refinancing activities in the current quarter.
SAIC recently announced the opening of a virtual lab environment known as the Innovation Factory, that delivers software services and solutions more quickly for our government customers. Using technologies developed and refined by SAIC as well as Red Hat, the Innovation Factory will enable customers to make rapid progress toward IT modernization and application transformation projects.
We also recently announced that through our alliance partnership with Amazon we have achieved Amazon Web Services government competency status. This designation recognizes that SAIC provides solutions and has deep experience working with government customers to deliver mission-critical workloads and applications using AWS. Achieving this significant milestone differentiates SAIC as an AWS partner that possesses deep mission expertise in defense systems, national security, and federal [inaudible] agencies, and our technical expertise of application migration to the cloud using AWS capabilities and services.
SAIC in the third quarter of FY 19 has reported the adjusted earnings per share of $1.35, beating the analysts’ estimates for the adjusted earnings per share of $1.14, as per Zacks Investment Research. The company had reported the adjusted revenue growth of 2.8 percent to $1.18 billion in the third quarter of FY 19, beating the analysts’ estimates for revenue of $1.16 billion. The revenue grew due to newly awarded contracts ($54 million), which includes an information technology (IT) integration contract supporting state and local customers, and increased orders in our supply chain portfolio ($24 million). These increases were partially offset by completion of contracts and other net decreases across our portfolio ($46 million). Adjusted operating income as a percentage of revenues increased to 7.4%, compared to 6.4% for the prior year quarter due to improved performance across the portfolio ($22 million), inclusive of newly awarded contracts, and higher net favorable changes in estimates related to performance obligations satisfied over time ($14 million). These improvements were partially offset by an increase in our inventory provision ($25 million).