Science Applications Q3 Profit Down - Update

(RTTNews) - Science Applications International Corp. (SAIC), Thursday reported a drop in profit for the third quarter, hurt largely by lower revenues reflecting delayed government contracts and reduced program activities.

Science Applications' third-quarter profit dropped to $22 million or $0.44 per share from $45 million or $0.90 per share last year.

On average, three analysts polled by Thomson Reuters expected earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude special items.

The company's revenues for the three-month period dropped to $974 million from $1.19 billion last year.

Analysts expected revenues of $939.93 million for the quarter.

Science Applications said revenues were hurt by ramp down of the DISN Global Solutions program and reduced activity on IT and logistics programs. Lower funding levels for material and subcontracts on Navy contract vehicles and delays in U.S. government contract awards due to budget pressures also negatively impacted revenues.

Science Applications, which provides scientific and engineering services mainly to the U.S. defense department, commenced operations on September 27 after spinning off from its former parent SAIC Inc, which was renamed as Leidos Holdings Inc.

"We successfully completed the separation into a new, publicly traded company and are excited to take advantage of market opportunities that SAIC's contract portfolio and operating model afford us," said Tony Moraco, Chief Executive Officer of SAIC. "Our third quarter performance was in line with our expectations, and we are well positioned to recoup from most of the impacts to our business from the government shutdown in this fiscal year."

For the fiscal year 2014, the company currently projects earnings of $2.13 to $2.33 per share, with revenues of $3.85 billion to $4.1 billion.

Analysts currently expect earnings of $2.47 per share on revenues of $4.01 billion.

The company also declared a quarterly dividend of $0.28 per share, payable on January 30, 2014, to stockholders of record on January 15, 2014.

SAIC closed Thursday's trading at $34.78, down $0.87 or 2.44%, on the Nasdaq.