Wednesday, engineering and technology applications company SAIC, Inc. (SAI), reported a rise in profit for the fourth quarter, as revenues increased 8%, with organic growth representing 7 percentage points of the consolidated growth for the quarter. The company's earnings and revenues for the quarter exceeded analysts' consensus estimate. SAIC also said it expects to meet all of its long-term financial goals in fiscal year 2010.
The San Diego, California-based company's net income for the fourth quarter increased to $120 million or $0.30 per share from $99 million or $0.24 per share in the prior-year quarter.
Income from continuing operations for the quarter rose 14% to 119 million from $104 million in the prior-year quarter. On a per-share basis, earnings from continuing operations for the quarter climbed 20% to $0.30 from $0.25 in the same period last year.
On average, thirteen analysts polled by First Call/Thomson Financial expected the company to earn $0.29 per share for the quarter. Analysts' estimates typically exclude one-time items.
Revenues for the quarter increased to $2.52 billion from $2.33 billion in the year-ago quarter topping analysts estimate of 2.49 billion for the quarter.
SAIC's internal, or non-acquisition, growth represented 7 percentage points of the consolidated growth for the quarter. Key drivers of internal growth included logistics, information collection and security, and defense information technology, which offset weakness in its commercial business.
In the previous third quarter, SAIC reported a rise in net income of $120 million or $0.30 per share from $105 million or $0.25 per share in the corresponding quarter last year. Income from continuing operations for the third quarter increased 7% to $118 million, while revenues increased 11% to $2.63 billion from $2.36 billion in the comparable period last year.
Operating income for the fourth quarter rose 21% to $208 million from $172 million in the corresponding quarter of last year.
Income from continuing operations for the fourth quarter grew more slowly than operating income, primarily because of an $8 million reduction in interest income net of interest expense and $13 million of impairments on several equity investments, partially offset by a lower tax rate resulting from a number of adjustments and credits.
Total cash flows from operations for the quarter were $153 million, up 28% from $120 million for the fourth quarter of fiscal year 2008. As at January 31, 2009, SAIC had $936 million in cash and cash equivalents and $1.1 billion in long-term debt.
Net new business bookings for the fourth quarter totaled $2.2 billion, representing a book-to-bill ratio of 0.9 for the fourth quarter.
SAIC's contract awards received during the quarter included a $97 million order from the U.S. Army, a five-year, $69 million contract from the National Aeronautics and Space Administration, and a $48 million five-year task order from the U.S. Army Human Resource Command.
Other notable contracts during the quarter included a U.S. Department of Energy contract with a nine-year period of performance and a total contract ceiling of $5 billion if all options are exercised. The company also received an U.S. Army Corp of Engineers contract with a ten-year period of performance and a total contract ceiling of $50 million. SAIC also won the Army's Biometrics Task Force contract, which is multiple-award contract with a five-year period of performance, with a total contract ceiling of $497 million for all awardees. SAIC also was awarded a single-award, five-year, $85 million contract to provide IT services for the Library of Congress Customer Support Services program.
Backlog of signed business orders at the end of fiscal year 2009 was $16.8 billion, of which $5.6 billion was funded. As compared to the end of fiscal year 2008, total backlog increased 12% and funded backlog increased 11%.
Mark Sopp, Chief Financial Officer, SAIC commented, In fiscal year 2009, we were able to post strong and balanced growth over the prior year and meet or exceed our three long-term financial targets for revenue growth, operating margin expansion, and earnings per share growth. Equally important in this market environment, effective working capital management generated strong operating and net cash flow, which has further built our financial strength heading into fiscal 2010.
For fiscal year 2009, SAIC's net income rose to $452 million from prior year's $416 million, while earnings per share increased to $1.12 from $1.00 a year ago. Income form continuing operations for the period increased 15% to $447 million from $390 million last year. On a per share basis, earnings from continuing operations rose 17% to $1.10 per share from $0.94 per share in the prior-year.
Revenues for the year increased 13% to $10.07 billion from $8.93 billion last year.
Analysts expected the company to report full-year earnings of $1.09 per share on revenue of $10.05 billion.
Amongst others in the industry, ManTech International Corp. (MANT), last month reported a 15% rise in fourth quarter profit as revenues increased 17% from the previous year period. The Fairfax, Virginia-based company reported fourth quarter net income increase of $24.6 million or $0.69 per share, while revenues for the quarter increased 17% to $494.7 million.
For 2010, the company's long-term, average annual financial goals include growing revenue internally in the 6% - 9% range, improving operating margin by 20 to 30 basis points until reaching a sustainable level between 8% and 9%, improving earnings per share from 11% - 18%, varying with internal financial performance and volume of acquisitions and share repurchases.
SAIC closed Wednesday's regular trading at $17.69, up $0.29 or 1.67%, on a volume of 3.27 million shares on the NYSE. In after hours, SAIC traded at $18.20, up $0.51 or 2.88%. In the last 52-week period, the stock trended in a range of $16.25 - $21.90, with a three-month average volume of 1.89 million shares.
For comments and feedback: contact firstname.lastname@example.org