SAIC sees bright spots amidst modest first-quarter numbers

Science Applications International Corp. experienced a modest 2 percent revenue growth for its first quarter 2012, which ended April 30, rising to $2.69 billion from $2.63 billion in the first quarter of fiscal 2011, the company reported following the June 2 closing of the stock markets.

Internal revenue growth, which represented 1 percent of the consolidated revenue growth for the quarter, resulted from increased revenues in the Intelligence and Cybersecurity Solutions and Defense Solutions segments, partially offset by reduced revenues in the Health, Energy and Civil Solutions segment, the company said.

Operating income for the quarter was $230 million, or 8.6 percent of revenue. That was a 12 percent increase from the $206 million, or 7.8 percent of revenue, during the corresponding quarter of fiscal 2011.

The improvement in operating income was the result of strong program performance, effective cost management and a $6 million gain on the sale of real estate, SAIC reported.

Income from continuing operations for the quarter was $130 million, up 5 percent from $124 million in the first quarter of fiscal year 2011, due primarily to the increase in operating income, partially offset by increased interest expense from the $750 million of debt issued in December 2010 and the return to a more normative tax rate compared to the prior year.

Breaking the numbers down by sector, Defense Solutions revenues for the quarter increased 2 percent from the first quarter of fiscal 2011.

Intelligence and Cybersecurity Solutions revenues for the quarter increased 7 percent from the same quarter of fiscal 2011.

But Health, Energy and Civil Solutions revenues for the quarter declined 4 percent from the first quarter of fiscal 2011.

Net business bookings totaled $3.6 billion in the first quarter, representing a book-to-bill ratio of 1.3, SAIC reported.

Large, competitive definite-delivery contract awards received during the quarter include:

• NASA Integrated Communications Services Support IDIQ contract worth a total of $1.3 billion.
• DISA Computing Support five-year task order worth $90 million.
• USDA IT Services Support five-year, $208 million task order.
• Military Health System Electronic Health Record Systems four-year, $53 million support contract.
• Naval Surface Warfare Center Scientific Research Program Support five-year, $41 million task order.

The company's backlog of signed business orders at the end of the first quarter was $18 billion, of which $5 billion was funded. Compared to the end of the first quarter of fiscal 2011, total backlog increased 14 percent while funded backlog decreased 8 percent.

"We remain focused on our strategy, including business re-engineering efforts to devote more resources towards growth, which has enabled us to achieve our business development objectives," said Walt Havenstein, SAIC chief executive officer, in the statement.

"This is paying off with new business awards, strong win rates and increased value of the opportunities awaiting decision, which validates our strategy of being more aggressive in this challenging environment,” he said.

SAIC, of McLean, Va., ranks No. 6 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.