Science Applications International Corp. [SAIC] on Monday reported strong third quarter financial results, with sales and earnings both higher than a year ago.

Net income increased 18 percent to $71 million, $1.22 earnings per share (EPS), from $60 million ($1.02 EPS) a year ago. Adjusting for acquisition, integration and restructuring costs, adjusted earnings were $1.85 EPS, handily beating consensus estimates of $1.49 per share.

Earnings in the quarter benefited from improved program performance.

Sales increased more than 4 percent to $1.9 billion from $1.8 billion a year ago, with just over half of the growth due to an acquisition and 2.1 percent organic. The organic growth was driven by the rampup in new and existing contracts.

SAIC estimates that impacts from the COVID pandemic knocked off about $30 million from the top line, mainly due to lower volume in the supply chain business.

“Despite recent challenges related to supply chain disruptions and a tight labor market, we remain confident in our ability to sustain organic growth into next year and increase free cash flow by approximately 10 percent,” Nazzic Keene, SAIC’s CEO, said on the company’s earnings call.

Prabu Natarajan, SAIC’s chief financial officer, said that the outlook for positive organic growth next fiscal year includes the possibility that the supply chain business doesn’t fully recover. He also said free cash flow next year is expected to be about 10 percent higher than the mid-point of its current guidance and then increase another 10 percent the following year.

Based on results so far in SAIC’s fiscal year 2022 and expectations for the fourth quarter, the company increased its adjusted earnings guidance by a quarter to between $6.75 and $6.95 EPS. SAIC also raised the low end of its sales outlook by $50 million to between $7.35 billion and $7.4 billion.

Guidance for free cash flow was also increased on the low end by $20 million with the new outlook pegged at between $450 million and $470 million.

Free cash flow in the quarter was $124 million and is $373 million so far this year. SAIC tallied $1.4 billion in orders in the quarter and backlog stood at $23.7 billion, up 10 percent from $21.5 billion at the start of the fiscal year.

Out of the pandemic, SAIC is “streamlining our facility footprint,” with a goal of achieving at least $25 million in annual cost savings, Keene told investors. The company is also offering employees the option of a four-day work week, she said.

Currently, 96 percent of SAIC’s employees are vaccinated against COVID-19 and that percentage to “increase modestly going forward,” Keene said.