CSRA Inc. [CSRA] on Wednesday after the close of markets reported higher earnings and sales in its second quarter driven by the acquisition last year of SRA International and program performance while the company maintained its financial outlook for the year.

Net income jumped 51 percent to $80 million, 46 cents earnings per share (EPS), from $53 million (35 cents EPS) a year ago. Adjusted earnings in the quarter were $229 million (56 cents EPS), were down 3 percent from a year ago but topped consensus estimates 10 cents per share.

CSRA President and CEO Larry Prior. Photo: CSRA
CSRA President and CEO Larry Prior. Photo: CSRA

Sales in the quarter climbed 30 percent to nearly $1.3 billion from $969 million a year ago on the back of the SRA acquisition, which closed on Nov. 30, 2015. Pro forma revenue, which assumes SRA was part of the company for the second quarter a year ago, slipped 4 percent from just over $1.3 billion.

Bookings in the quarter were a stout $2.4 billion, nearly two times sales, while total backlog rose 2 percent from a year ago to $15.5 billion, $3 billion of which is funded. Larry Prior, CSRA’s president and CEO, said on Wednesday evening’s earnings call that 63 percent of the orders in the quarter were new business, demonstrating the success of CSRA’s business development activities.

The company’s win of a five-year $744 million task order to support Army logistics is under protest and isn’t part of the bookings or backlog figures. Prior noted that the Army organization that awarded the contract has never had an award decision overturned, so the company is confident its win will be upheld.

Prior said the company is “thrilled” with the results, adding on the earnings call that it is the best quarter since it went public nearly a year ago. That said, CSRA maintained its outlook for the fiscal year with sales still expected to be between $5 billion and $5.2 billion, adjusting earnings between $870 million ($1.91 EPS) and $905 million ($2.04 EPS), and free cash flow between $300 million and $350 million.

Dave Keffer, CSRA’s chief financial officer, said on the call that the new bookings give the company visibility on meeting the low end of its revenue guidance range and that high margins point to meeting the upper end of the per share earnings guidance.

Prior said the strong bookings and backlog demonstrate the company is on a path to “pivot towards growth,” adding that its business development “engine is now firing on all cylinders and we have proven that we can beat entrenched competitors on both technical innovation and cost efficiency.” CSRA will return to organic growth in its next fiscal year, he said.

The pipeline of opportunities remains strong, Prior said, saying CSRA submitted $4.9 billion in proposals in the second quarter and at the end of the quarter at $12 billion in bids outstanding.

Free cash flow in the quarter was $8 million. CSRA made $16 million in dividend payments and $8 million repurchasing its stock.