SAIC reports modest third quarter

Science Applications International Corp.  is reporting modest year-over-year revenue growth and "solid new business bookings” in its latest quarterly report.

Revenue for the third quarter of fiscal 2013 were $2.87 billion, a 3 percent increase from the $2.79 billion in third quarter of fiscal 2012. The company's fiscal 2013 third quarter ended Oct. 31, 2012.

"Our outlook continues to be cautious as the government approaches critical fiscal decisions. Under any scenario, we expect government spending to be constrained, especially in the defense market, and we are preparing for the budget pressures,” said the company’s chairman and CEO, John Jumper.

SAIC reported operating income for the quarter was $193 million, compared to a loss last year of $20 million. Last year also included a $232 million loss provision related to the CityTime workforce management contract with the New York City, SAIC said. Third quarter operating income of last year, excluding CityTime, was $212 million.

The reduction in operating income, as adjusted, was primarily attributable to $15 million of expenses for the company's planned split into two new companies sometime next year, the company said.

Income from continuing operations for third quarter fiscal 2013 was $112 million, an increase from last year’s $92 million.

"For the long term, our plan to separate SAIC into two highly competitive and differentiated companies is well underway and generating great excitement in the company.  In the near term, we are taking action to reduce our cost structure in response to an increasingly competitive environment," Jumper said.

The company plans to lay off 700 employees to reduce its indirect costs. "While these decisions are painful, they are necessary to meet competitive demands, customer cost expectations and effectiveness, and to deliver financial performance for our shareholders,” he said.