Parsons Stock Dropped On Q1 Revenue Miss

Parsons Corp PSN reported a first-quarter FY21 revenue decline of 10% year-on-year to $874.7 million, missing the analyst consensus of $902.68 million. The pandemic affected $64 million of contract work, and lower pass-through revenue drove the decline.
Federal Solutions Segment revenue declined 5% Y/Y to $452.1 million, and the Critical Infrastructure Segment revenue declined 14% Y/Y to $422.6 million.
Total backlog rose 4.7% Y/Y to $8.2 billion.
Adjusted EBITDA rose 14% to $69 million, and margin expanded 170 basis points 7.9%.
Adjusted EPS of $0.34 beat the analyst consensus of $0.15.
The company held $398 million in cash and equivalents and used $66 million in operating cash flow.
Guidance: Parsons sees FY21 revenue guidance of $3.85 billion to $4.05 billion vs. analyst consensus is $3.95 billion. Adjusted EBITDA guidance lies between $350 million to $375 million.
The company delivered strong bookings and significant margin expansion with results in line with internal expectations and historical seasonal patterns, and continued to win large new contracts, Chair and CEO Chuck Harrington said.
Revenue growth will accelerate while margins will continue to expand and free cash flow conversion will remain strong due to the technology solutions aligned with the Biden Administration's infrastructure and defense priorities, Harrington added.
Price action: PSN shares traded lower by 4.12% at $41.90 on the last check Wednesday.

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