Stock under pressure: Science Applications International Corp (NYSE: SAIC)

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Science Applications International Corp (NYSE: SAIC) stock fell over 6.8% (as of June 13th, 2018’ 10:46 AM GMT-4; Source: Google finance) through the company posted better than expected results for the first quarter of FY 19. Year over year growth was primarily due to new contracts awarded in mid-Fiscal Year ’18 with NASA and the Environmental Protection Agency, and increased orders in the supply chain portfolio. The company posted the EBITDA margins of 6.5% for the first quarter, which were slightly below the company’s expectations due to the increased volume of supply chain materials and investments in the platform integration business. Operating cashflow was favorable through the effective management of working capital and strong collections in the first quarter.

SAIC in the first quarter of FY 19 has reported the adjusted earnings per share of $1.13, beating the analysts’ estimates for the adjusted earnings per share of $1.02 as per Zacks Investment Research. The company had reported the adjusted revenue growth of 6.5 percent to $1.18 billion in the first quarter of FY 19, beating the analysts’ estimates for revenue of $1.12 billion. The revenue grew due to revenue on new contracts primarily supporting NASA and the Environmental Protection Agency (EPA) ($47 million) and increased orders in the supply chain portfolio ($64 million). These increases were partially offset by completion of contracts and other net decreases across the portfolio ($39 million). Further, the net bookings for the first quarter were approximately $1 billion, which reflects a book-to-bill ratio of 0.8. SAIC’s estimated backlog of signed business orders at the end of the quarter was approximately $10 billion of which $1.9 billion was funded.

For the first quarter 2019, the total cash flows provided by operating activities were $88 million, consistent with the same period in the prior year. A net increase in working capital investments in platform integration programs supporting the U.S. Navy and Marine Corps was offset by strong customer collections in the current quarter. During the first quarter SAIC deployed $54 million of capital, consisting of $32 million in plan share repurchases (412 thousand shares) under SAIC’s previously announced share repurchase program, $14 million in cash dividends and an $8 million term loan repayment. SAIC has declared a cash dividend of $0.31 per share of the company’s common stock payable on July 27, 2018 to stockholders of record on July 13, 2018.

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