Science Applications International Corp. [SAIC] last Thursday reported higher sales and earnings in its fiscal year 2021 fourth quarter, driven by its acquisition last year of the federal business of Unisys [UIS] and improved operating income.
Net income in the quarter was up 5 percent to $62 million, $1.05 earnings per share (EPS), from $59 million ($1.01 EPS) a year ago, despite a headwind due to the COVID-19 pandemic. Acquisition and integration costs trimmed $7 million from the bottom line. Adjusted per share earnings of $1.67 easily topped consensus estimates of $1.45 EPS.
Sales were up 11 percent to $1.7 billion from $1.5 billion a year ago, with just 1 percent of the gain organic. SAIC said that it suffered about $80 million in COVID-related headwinds due to reduce volume in its supply chain business and lower training service work for the Federal Aviation Administration.
For the fiscal year, sales were also up 11 percent to $7.1 billion from $6.4 billion the prior year, with organic growth also 1 percent. COVID headwinds negatively impacted sales by about $250 million.
Net income for the year was down 8 percent to $209 million ($3.56 EPS) from $226 million ($3.83 EPS) in fiscal year 2020.
SAIC initiated guidance for FY ’22, with sales forecast to be in the range of $7.1 billion to $7.3 billion, with COVID headwinds expected to dampen sales by between $150 million to $200 million. The guidance for organic growth is flat to 3 percent.
The outlook for adjusted earnings is between $6 and $6.25 EPS, well below consensus expectations of $7.22 EPS. The outlook for free cash flow is between $430 million and $470 million.
Free cash flow in FY ’21 was $709 million. The company boasted strong orders for the year of $11.9 billion and its backlog at year-end stood at $21.5 billion, up handsomely from $15.3 billion a year ago.