Hot Move to Watch: Science Applications International Corporation (NYSE: SAIC)

On Monday, Shares of Science Applications International Corporation (NYSE: SAIC) jumped 1.59% to $69.68. The stock opened its trade at $69.44 and after floating in a price range of $68.99 to $70.30; the stock grabbed the investor’s attention and traded 58,275 shares as compared to its average daily volume of 329.16K shares. The stock’s institutional ownership stands at 68.40%.

Science Applications International Corporation (SAIC), a leading technology integrator providing full life-cycle services and solutions in the technical, engineering, intelligence, and enterprise information technology markets, recently declared results for the second quarter ended August 3, 2018.

Second Quarter of Fiscal Year 2019: Summary Operating Results:

Revenues for the quarter increased $37.0M, or 3.4%, contrast to the prior year quarter because of increased orders in our supply chain portfolio ($31.0M) and revenue on new contracts mainly supporting NASA and other federal civilian agencies ($24.0M). These increases were partially offset by completion of contracts and other net decreases across our portfolio ($18.0M). Operating income as a percentage of revenues increased to 6.6%, contrast to 5.5% for the prior year quarter, driven by improved performance across our portfolio and the continued realization of cost efficiencies.

Net income for the quarter increased $13.0M as contrast to the same period in the prior year because of higher operating income. Adjusted EBITDA as a percentage of revenues for the quarter increased to 7.5%, contrast to 6.7% for the prior year quarter, driven by improved performance across our portfolio and the realization of cost efficiencies resulting from our restructuring activities in fiscal 2018.

Diluted earnings per share were $1.13 for the quarter. The weighted-average diluted shares outstanding during the quarter were 43.20M shares.

Cash Generation and Capital Deployment:

Total cash flows used in operating activities for the second quarter were $12.0M, contrast $35.0M used in operating activities during the same period in the prior year. The improvement is mainly because of prior year delayed collections caused by a government payment system issue, partially offset by a boost in working capital investments in platform integration programs.

During the quarter SAIC deployed $22.0M of capital, consisting of $13.0M in cash dividends and a $9.0M term loan repayment. No plan share repurchases were made during the quarter as SAIC evaluated alternative capital deployment opportunities counting the pending acquisition of Engility.

New Business Awards:

Net bookings for the quarter were about $1.50B, which reflects a book-to-bill ratio of 1.4. SAIC’s estimated backlog of signed business orders at the end of the quarter was about $10.50B of which $2.10B was funded.

SAIC has a market value of $2.94B while its EPS was booked as $4.02 in the last 12 months. The stock has 42.82M shares outstanding. In the profitability analysis, the company has gross profit margin of 9.40% while net profit margin was 4.20%. Beta value of the company was 1.50; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.40.

Bobbie Collins

Bobbie Collins gives us an insight into the most recent news hitting the Technology Sector in Wall Street. He has been an independent financial adviser for over 10 years in the city and in recent years turned his experience in finance and passion for journalism into a full time role. He performs analysis of Companies and publicizes valuable information for shareholder community. Collins is an accomplished journalist who has a passion for travel. His desire to see the world has taken him to countries around the world and given him the opportunity to report for some of the top news organizations.