Science Applications International Corp (SAIC) (NYSE: SAI) after-market close on Thursday reported better-than-expected fiscal first quarter revenue and raised its outlook on full-year revenue. Nevertheless, earnings in the quarter fell short of expectations.
For the quarter which ended on July 31, the company reported that its net income contracted 37% to $108 million, or 32 cents a share, from $171 million, or 50 cents a share, in the year earlier quarter. Revenue climbed 10 percent to $2.85 billion from $2.6 billion.
The consensus forecast was for earnings of 33 cents a share on revenue of $2.67 billion.
Among SAIC’s several business divisions, revenue from defense unit soared 14% to $1.24 billion, while revenue from its intelligence and cyber security increased 8% to $919 million. Revenue from company’s health, energy, and civil solutions unit rose 5% to $692 million. During the period, the company said it booked $2.2 billion in business.
The company maintained its outlook on full-year earnings which is expected between $1.26 and $1.36 a share. However, it upwardly revised its outlook on both lower and upper range for full-year revenue to $ 10.9 and $11.4 billion from $10.7 and $11.2 billion.
The consensus forecast is for earnings of $1.34 per share on revenue of $10.91 billion
Meanwhile, the company announced that it will be separating itself into two publicly traded companies. While one business will focus on science and technology for national security, engineering and health clients, the other unit will concentrate on government technical services and enterprise information technology.
According to SAIC, the science and technology business will generate about $7 billion in annual revenue, and the government technical services business is expected to have nearly $4 billion in revenue per year.
The company said that splitting up business in two separate entities will help it avoiding real and perceived conflict of interest that could deter them from winning new contracts. Moreover, a split would also allow to effectively implementing different strategies for different units, said the company.
Following the earnings announcement, SAIC stock jumped leaped 9.7%, to $12.95 in aftermarket hours on Thursday. On Friday, shares gained another 3.39%, to close at $12.21.
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