SAIC Delivered Mixed Q4 Results Along With Weak Outlook

Science Applications International Corp (NYSE:SAIC) was founded in 1969 by nuclear physicist and former GA Technologies employee Dr. Robert Beyster. He and his handful of employees generated revenue of nearly $25,000 in the first year primarily from research contracts. Over the years, the company grew by providing technological expertise to U.S. defense. However, it disclosed very little information regarding the specific of those services. Even today, SAIC generates most of its revenue by offering technical, engineering, and IT services primarily to the U.S. government.

The company recently announced mixed financial results for the fourth quarter. SAIC reported earnings of $62 million, or $1.05 per share for the three months ended January 29, slightly above $59 million, or $1.01 per share in the comparable period of 2020. On an adjusted basis, the company earned $1.67 per share, above analysts’ average estimate of $1.45 per share.

Revenue for the quarter rose 11 percent on a year-over-year basis to $1.72 billion, though missed the consensus forecast of $1.78 billion. SAIC stock fell more than 16 percent on Thursday following the results.

SAIC also issued a disappointing outlook for fiscal 2022. It expects adjusted profit in the range of $6 per share to $6.25 per share and sales between $7.1 billion-$7.3 billion for the current fiscal year. Analysts on average had predicted an adjusted profit of $7.20 per share on revenue of $7.62 billion.

Separately, Stifel downgraded SAIC stock following weaker-than-expected Q4 revenue and a weak outlook for FY 2022. The research firm cut its ratings for the stock from “Buy” to “Hold” and trimmed its price target from $115 per share to $90 per share.

Nevertheless, SAIC’s CEO Nazzic Keene expressed her satisfaction over the results. She said in a statement, “SAIC has made rapid advancements to the business portfolio, financial profile, and return of capital over the past several years. And despite a challenging fiscal year 2021, SAIC continued that journey.”

See also 10 Best Defense Stocks To Buy Now and 15 Largest Defense Companies.