Sure, the economy may be slow. But the work of defending the country -- and profiting with the Defense Department as your best customer -- is never done. Just ask
On Friday, President Obama announced the administration's renewed focus on cyber security. By Tuesday, SAIC, a technology defense contractor poised to take advantage of the shift, announced a new $21 million cyber security contract with the fed. And, just for good measure, today SAIC beat the street with an impressive earnings post.
The San Diego-based concern reported upward trends across the board. Revenues came to $2.65 billion, which is up 12% from the same period last year. Operating income grew 17% to $204 million. Net income, which was at $103 million, or 24 cents per share, in the year over period, grew to $116 million, or 28 cents. Earnings from continuing operations rose 16% to 29 cents per share.
Analysts polled by Thomson Reuters had forecasted an EPS of 27 cents per share on $2.51 billion in revenues.
Though new business awards for the company totaled $2.6 billion in the first quarter, the news wasn't all rosy. In May, it was reported that a $160 billion contract meant to modernize U.S. warfare was put into limbo. Defense secretary Robert Gates and the military brass said the Future Combat Systems program will be rejiggered and costs reduced.
As one of the two leads on the contract, SAIC's future role remains uncertain. Still, the company put on its best face today, saying it will still have a "significant role" under the reconstituted arrangement and noting that the contract constitutes only 3% of its yearly revenues. The company even forecasted earnings to bump up another 11% to 18%.
"All of our major metrics -- revenue, operating margin, earnings per share, and cash flow -- were robust, and virtually all of our business units met or exceeded our expectations," CEO Ken Dahlberg said in a release. "Although the potential restructuring of FCS provides some uncertainty, based on our strong market position across our wide business base, we expect fiscal year 2010 to be another solid year for the company."
Shares in the company finished in the red in regular trading, but picked up following the earnings announcement. SAIC was changing hands up 5% in the after hours period.
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