Core Viewpoint - SAIC reported quarterly earnings of $2.61 per share, exceeding the Zacks Consensus Estimate of $2.17 per share, and showing an increase from $2.27 per share a year ago, representing an earnings surprise of 20.28% [1][2] Financial Performance - The company achieved revenues of $1.98 billion for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 2.32% and up from $1.9 billion year-over-year [2] - Over the last four quarters, SAIC has exceeded consensus EPS estimates two times and topped consensus revenue estimates four times [2] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [3] - Current consensus EPS estimate for the upcoming quarter is $2.07 on revenues of $1.8 billion, and for the current fiscal year, it is $8.21 on revenues of $7.4 billion [8] Industry Context - The Computers - IT Services industry, to which SAIC belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook [9] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

Core Insights - Science Applications International Corporation (SAIC) reported revenues of $1.98 billion for the third quarter, reflecting a 4.3% growth compared to the previous year [1][3] - The company achieved a net income of $106 million and an adjusted EBITDA of $197 million, which is 10.0% of revenues [1][5] - SAIC's diluted earnings per share increased to $2.13, up 21% from $1.76 in the prior year [1][6] - The company has increased its Fiscal Year 2025 guidance for revenue and adjusted diluted EPS, now expecting revenue between $7.425 billion and $7.475 billion [1][18] Financial Performance - Revenues increased by $81 million or 4% year-over-year, driven by higher volumes on existing and new contracts [3][31] - Operating income rose to $160 million, a 12% increase from the previous year, with an operating margin of 8.1% [2][30] - Adjusted operating income was $195 million, representing a 10% increase, with an adjusted operating margin of 9.9% [2][30] - Net cash provided by operating activities was $143 million, a 42% increase compared to the prior year [9][29] Cash Generation and Capital Deployment - SAIC deployed $142 million in capital during the quarter, including $115 million for share repurchases and $18 million in cash dividends [10][11] - The Board of Directors authorized a $1.2 billion share repurchase program, representing 20% of the company's market value [1][11] - A cash dividend of $0.37 per share was declared, payable on January 24, 2025 [12] Backlog and Contract Awards - Net bookings for the quarter were approximately $1.5 billion, resulting in a book-to-bill ratio of 0.7 [1][13] - The estimated backlog at the end of the quarter was approximately $22.4 billion, with $4.5 billion funded [1][13] - Notable contract awards included a $229 million contract from the U.S. Department of Defense and a $118 million task order from the Department of Transportation [14][15] Strategic Partnerships and Future Outlook - SAIC announced an expanded strategic partnership with Wind River to enhance technology integration for government customers [17] - The company expects to exceed $25 billion in submissions for the year, up from a prior target of $22 billion, indicating a positive outlook for growth [2][18]

Financial Performance - Revenues for Q3 FY2025 were $1.98 billion, representing a 4.3% increase year-over-year[2] - Net income for the quarter was $106 million, with diluted earnings per share of $2.13, up 21% from $1.76 in the prior year[4] - Adjusted EBITDA was $197 million, accounting for 10.0% of revenues, an increase from 9.4% in the same period last year[4] - Total revenues for the quarter increased to $1,976 million, up 4.3% from $1,895 million in the same period last year[26] - Total operating income for the quarter was $160 million, compared to $143 million in the same period last year, reflecting a 11.9% increase[26] - Adjusted operating margin for the total increased to 9.9%, up from 9.4% in the prior year[28] - Net income for the three months ended November 3, 2023, was $93 million, compared to $106 million for the same period in 2024, reflecting a decrease of 12.3%[39] - Adjusted diluted earnings per share for the three months ended November 1, 2024, was $2.61, compared to $2.13 for the same period last year, reflecting a 22.5% increase[49] - Net income for the three months ended November 1, 2024, was $130 million, up from $106 million, representing a 22.6% year-over-year growth[49] - Diluted EPS for the three months ended November 3, 2023, was $2.27, up from $1.76, indicating a 28.9% increase year-over-year[50] - For the nine months ended November 1, 2024, adjusted diluted EPS was $6.56, compared to $5.17 for the same period last year, reflecting a 27% increase[53] Cash Flow and Expenditures - Cash flows from operating activities increased by $42 million to $143 million compared to the prior year[6] - Free cash flow for the quarter was $9 million, a decrease of 91% from $97 million in the prior year[4] - Cash and cash equivalents at the end of the period were $54 million, down from $320 million at the beginning of the period[25] - The company reported a net cash used in financing activities of $146 million, compared to $132 million in the same quarter last year[25] - The company expects net cash provided by operating activities to be between $520 million and $540 million for the upcoming period[56] - Total expenditures for property, plant, and equipment are projected to be approximately $30 million[56] - The company reported a net cash provided by operating activities of $379 million for the nine months ended November 1, 2024, compared to $333 million in the prior year[56] - Transaction-adjusted free cash flow for the nine months ended November 1, 2024, was $271 million, down from $367 million in the previous year[56] Backlog and Bookings - Net bookings for the quarter totaled approximately $1.5 billion, resulting in a book-to-bill ratio of 0.7[10] - The estimated backlog at the end of the quarter was approximately $22.4 billion, with $4.5 billion funded[10] - Total backlog as of November 1, 2024, is estimated at $22,387 million, with funded backlog at $4,466 million and negotiated unfunded backlog at $17,921 million[37] - The company reported a total backlog of $22,763 million as of February 2, 2024, with funded backlog at $3,539 million and negotiated unfunded backlog at $19,224 million[37] Segment Performance - Defense and Intelligence segment revenues rose by $36 million or 2% compared to the prior year, driven by ramp-up in volume on existing and new contracts[31] - Civilian segment revenues increased by $45 million or 11% year-over-year, primarily due to ramp-up in volume on existing contracts[33] Guidance and Shareholder Actions - The company increased its FY2025 revenue guidance to $7.425 billion - $7.475 billion and adjusted diluted EPS guidance to $8.50 - $8.65[16] - A $1.2 billion share repurchase program was authorized, representing 20% of the company's market value[2] Other Financial Metrics - Free cash flow for the three months ended November 1, 2024, was $9 million, a significant decrease from $97 million in the prior year[56] - Adjusted EBITDA for the nine months ended November 3, 2023, was $541 million, representing an adjusted EBITDA margin of 9.5%[39] - Adjusted operating income for the three months ended November 3, 2023, was $178 million, with a non-GAAP operating margin of 9.4%[42] - The company incurred restructuring and impairment costs of $2 million for the three months ended November 3, 2023[42] - The company reported a net loss on divestitures of $240 million for the nine months ended November 3, 2023[42]

Core Viewpoint - SAIC is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending October 2024, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to reveal quarterly earnings of $2.17 per share, reflecting a year-over-year decrease of 4.4% [3]. - Revenues are projected to reach $1.93 billion, which is an increase of 1.9% compared to the same quarter last year [4]. Estimate Revisions - The consensus EPS estimate has been revised 1.47% higher in the last 30 days, indicating a collective reassessment by analysts [5]. - The Most Accurate Estimate for SAIC is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -4.46%, suggesting a bearish outlook from analysts [11][12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the deviation of actual earnings from consensus estimates, with a positive reading being a strong predictor of an earnings beat [8][9]. - However, the current negative Earnings ESP reading for SAIC complicates the prediction of an earnings beat [13]. Historical Performance - In the last reported quarter, SAIC exceeded the expected earnings of $1.86 per share by delivering $2.05, resulting in a surprise of +10.22% [14]. - Over the past four quarters, SAIC has beaten consensus EPS estimates twice [15]. Conclusion - While SAIC does not appear to be a strong candidate for an earnings beat, investors should consider other factors when making decisions regarding the stock ahead of the earnings release [18].

RESTON, Va., Nov. 22, 2024 (GLOBE NEWSWIRE) -- Science Applications International Corp. (NASDAQ: SAIC) today announced the appointment of U.S. Army veteran and former Deputy Secretary of the U.S. Department of Homeland Security, John K. Tien, Jr., to its Board of Directors, effective December 2, 2024. Tien has extensive background across government, military, private and public sectors, and will bring that expertise to his board position at SAIC. Mr. Tien has been appointed to serve on the Board’s Nominatin ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Science Applications International (SAIC) as a strong candidate for value investors due to its favorable financial metrics and Zacks Rank [2][4][7] Company Summary - Science Applications International (SAIC) currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4] - SAIC's P/E ratio stands at 17.30, significantly lower than the industry's average of 39.44, suggesting it may be undervalued [4] - The stock's Forward P/E has fluctuated between 13.35 and 17.94 over the past year, with a median of 15.57, indicating stable earnings expectations [4][6] - SAIC has a P/S ratio of 1, compared to the industry's average P/S of 2.18, reinforcing the notion of undervaluation [5] - The P/CF ratio for SAIC is 18.21, which is attractive when compared to the industry's average P/CF of 72.14, further supporting its undervalued status [6] - Overall, the financial metrics suggest that SAIC is likely undervalued and stands out as one of the market's strongest value stocks [7]

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on ke ...

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both. Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor. Zacks Premium includes access to the Zacks Style Scores as well. What are the Zacks Style Scores? D ...

Core Insights - The article emphasizes the importance of earnings estimates and revisions in identifying strong stocks, while also acknowledging that investors have their own strategies [1] - Value investing is highlighted as a popular method for finding great stocks across various market conditions [2] - Zacks has developed a Style Scores system to identify stocks with specific traits, particularly focusing on the "Value" category for value investors [3] Company Analysis: Science Applications International (SAIC) - SAIC currently holds a Zacks Rank of 2 (Buy) and an A for Value, indicating strong performance potential [4] - The stock is trading at a P/E ratio of 16.32, significantly lower than the industry average P/E of 38.70 [4] - Over the past year, SAIC's Forward P/E has fluctuated between a high of 17.94 and a low of 13.35, with a median of 15.40 [4] - The P/S ratio for SAIC is 0.97, compared to the industry's average P/S of 2.08, suggesting that SAIC may be undervalued [5] - These metrics indicate that SAIC is likely undervalued and has a strong earnings outlook, making it an attractive value stock at present [6]

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both. Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor. Zacks Premium includes access to the Zacks Style Scores as well. What are the Zacks Style Scores? The ...