Why IT Company SAIC's Shares Are Surging Today

Science Applications International Corp (NYSE: SAIC) reported a 1% revenue decline Y/Y in Q3 FY24 to $1.895 billion, beating the consensus of $1.790 billion.

The sale of the logistics and supply chain management business, the deconsolidation of the Forfeiture Support Associates J.V. (FSA), and contract completions mainly led to the decline.

Adjusting for the impact of the divestiture of the Supply Chain Business and the deconsolidation of FSA, revenues grew by 10.6%.

Adjusted EPS of $2.27 beat the consensus of $1.69.

The adjusted operating margin expanded by 50 bps to 7.6%. Adjusted EBITDA margin improved by 50 bps to 9.4%.

SAIC generated $97 million in free cash flow and held $311 million in cash and equivalents.

Net bookings for the quarter were $2.5 billion, reflecting a book-to-bill ratio of 1.3. The estimated backlog was around $23.1 billion at the end of the quarter. 

FY24 Outlook: SAIC raised revenue guidance to $7.325 billion - $7.350 billion (prior $7.20 billion - $7.25 billion) vs. the consensus of $7.240 billion.

SAIC increased adjusted EPS guidance to $7.70 - $7.90 (prior $7.20 - $7.40) above the consensus of $7.41.

Price Action: SAIC shares are trading higher by 7.56% at $128.99 premarket on the last check Monday.