SAIC Earnings: Here’s Why Investors are Selling Shares Now

SAIC, Inc. (NYSE:SAI) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 5.61%.

SAIC, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 59.38% to $0.13 in the quarter versus EPS of $0.32 in the year-earlier quarter.

Revenue: Decreased 13.13% to $2.47 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: SAIC, Inc. reported adjusted EPS income of $0.13 per share. By that measure, the company missed the mean analyst estimate of $0.22. It missed the average revenue estimate of $2.55 billion.

Quoting Management: “This quarter we experienced both operational successes and challenges. Our financial results and outlook were impacted by a number of discrete items relating to the planned separation of SAIC into two companies, net charges for underperforming programs and contracts coupled with the ongoing effects of sequestration. As a result, we have prudently chosen to lower our fiscal year 2014 guidance, not only to address these items but because of the continuing challenges posed by the current environment. Nevertheless, the business continues to generate strong operating cash flow, which exceeded $200 million in the quarter. Furthermore, we continue to make progress on our cost containment programs and improved rates that will benefit us as we move forward ultimately as two highly focused and purpose built companies,” said John P. Jumper, SAIC Chairman and Chief Executive Officer. “The entire SAIC leadership team and our nearly 37,000 employees remain excited and committed to the planned separation and the enormous potential of two new companies to be more competitive in the markets they will address.”

Key Stats (on next page)…

Revenue decreased 8.61% from $2.71 billion in the previous quarter. EPS decreased 43.48% from $0.23 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.32 to a profit $0.33. For the current year, the average estimate has moved down from a profit of $1.17 to a profit of $1.13 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)