Booz Allen Hamilton [BAH] on Wednesday reported a double-digit increase in second quarter earnings on higher sales and a lower tax rate.
Net income increased 12 percent to $62.8 million, 41 cents earnings per share (EPS), from $56.2 million a year ago, topping consensus estimates by 3 cents per share. Sales increased nearly 6 percent to $1.4 billion from $1.3 billion a year ago.
The ability to hire professionals is critical to the company’s growth. In the second quarter Booz Allen added 230 employees over the first quarter.
The management and technology consulting firm said the higher sales were due to increased customer demand and an increase in billable expenses. The earnings results were driven by the higher sales and a lower tax rate.
Based on the results in the quarter, Booz Allen raised the bottom end of its guidance range for the year, with sales now expected to be up 3 percent to 5 percent versus fiscal year 2016. The bottom end of the prior outlook was up 2 percent for FY ’17. Per share earnings are expected to be between $1.63 and $1.70 EPS, with the bottom of the prior guidance at $1.60 EPS.
Bookings in the quarter were nearly 2.2 times sales and the overall backlog stood at $13.6 billion, up 9 percent from $12.6 billion a year ago. Free cash flow in the quarter was a robust $196.5 million.
“The fundamentals of our business are strong,” Horacio Rozanski, president and CEO of Booz Allen, said at the outset of the company’s earnings call. “We’re seeing and capitalizing on healthy demand for clients, we’re managing our operations with agility, and we’re leveraging substantial recent investments in growth areas to bring clients comprehensive solutions that combine our consulting expertise and broad mission knowledge with the most advanced technologies.”