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Booz Allen (BAH) Shares Barely Move Since Q2 Earnings Beat
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Booz Allen Hamilton Holding Corp. (BAH - Free Report) reported impressive second-quarter fiscal 2023 results, with both earnings and revenues beating the Zacks Consensus Estimate. However, the better-than-expected results failed to impress the market as there has not been any major price change since the earnings release on Oct 28.
The stock appreciated 24.6% over the past year, outperforming the 7.1% rise of the industry it belongs to.
Quarterly adjusted earnings per share of $1.34 beat the consensus mark by 19.6% and increased 6.4% on a year-over-year basis.
Revenues, Backlog & Headcount Increase Y/Y
Total revenues of $2.3 billion beat the Zacks Consensus Estimate by 2.5% and increased 9.2% on a year-over-year basis. Revenues, excluding billable expenses, were $1.6 billion, up 10.1% on a year-over-year basis. Billable expenses contributed 30% to revenues.
Total backlog increased 9.8% from the prior-year quarter’s reported figure to $31.8 billion. The funded backlog of $5.5 billion increased 11.3% year over year. The unfunded backlog was up 8.9% to $10.4 billion. Priced options were up 9.8% to $16 billion. Book-to-bill ratio was 2.4, up 18.2% year over year. The headcount of 30,012 increased 2.7% year over year.
Margins Decline
Adjusted EBITDA amounted to $285.9 million, up 6% year over year. Adjusted EBITDA margin on revenues was 12.4%, down from the year-ago quarter’s 12.8%. Adjusted EBITDA margin on revenues, excluding billable expenses, decreased to 17.7% from 18.4% in the year-ago quarter.
Key Balance Sheet & Cash Flow Numbers
Booz Allen exited the quarter with cash and cash equivalents of $756.5 million compared with $497.8 million at the end of the prior quarter. Long-term debt (net of current portion) was $2.8 billion compared with $2.7 billion in the prior quarter.
The company generated $272.7 million of net cash from operating activities. Capital expenditures were $16 million, and free cash flow was $256.7 million. The company paid out dividends worth $58.8 million and repurchased shares worth $30 million in the reported quarter.
Booz Allen Hamilton Holding Corporation Price, Consensus and EPS Surprise
Booz Allen currently projects revenue growth in the range of 8-10% compared with the previous projection of 5-9%. It expects adjusted EPS in the range of $4.25-$4.5 compared with the prior expectation of $4.15-$4.45 per share. The midpoint ($4.38 per share) of the revised EPS guidance is below the current Zacks Consensus Estimate of $4.43.
Adjusted EBITDA is expected to be $975-$1015 million compared with the prior anticipation of $950–$1,000 million. Adjusted EBITDA margin on revenues is anticipated in the range of high 10%-to-low 11% compared with the previous anticipation of mid-to-high 10%. Net cash provided by operating activities is expected in the range of $875-$950 million compared with the prior expectation of $850-$950 million.
Recent Performance of Some Other Business Services Companies
Equifax (EFX - Free Report) reported stellar third-quarter 2022 results, wherein both its earnings and revenues surpassed the respective Zacks Consensus Estimate.
EFX’s adjusted earnings of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. Revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year.
OMC’s earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.
The Interpublic Group of Companies (IPG - Free Report) reported third-quarter 2022 adjusted earnings of 63 cents per share, beating the Zacks Consensus Estimate by 6.8%. The bottom line has been constant on a year-over-year basis.
IPG’s net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.
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Booz Allen (BAH) Shares Barely Move Since Q2 Earnings Beat
Booz Allen Hamilton Holding Corp. (BAH - Free Report) reported impressive second-quarter fiscal 2023 results, with both earnings and revenues beating the Zacks Consensus Estimate. However, the better-than-expected results failed to impress the market as there has not been any major price change since the earnings release on Oct 28.
The stock appreciated 24.6% over the past year, outperforming the 7.1% rise of the industry it belongs to.
Quarterly adjusted earnings per share of $1.34 beat the consensus mark by 19.6% and increased 6.4% on a year-over-year basis.
Revenues, Backlog & Headcount Increase Y/Y
Total revenues of $2.3 billion beat the Zacks Consensus Estimate by 2.5% and increased 9.2% on a year-over-year basis. Revenues, excluding billable expenses, were $1.6 billion, up 10.1% on a year-over-year basis. Billable expenses contributed 30% to revenues.
Total backlog increased 9.8% from the prior-year quarter’s reported figure to $31.8 billion. The funded backlog of $5.5 billion increased 11.3% year over year. The unfunded backlog was up 8.9% to $10.4 billion. Priced options were up 9.8% to $16 billion. Book-to-bill ratio was 2.4, up 18.2% year over year. The headcount of 30,012 increased 2.7% year over year.
Margins Decline
Adjusted EBITDA amounted to $285.9 million, up 6% year over year. Adjusted EBITDA margin on revenues was 12.4%, down from the year-ago quarter’s 12.8%. Adjusted EBITDA margin on revenues, excluding billable expenses, decreased to 17.7% from 18.4% in the year-ago quarter.
Key Balance Sheet & Cash Flow Numbers
Booz Allen exited the quarter with cash and cash equivalents of $756.5 million compared with $497.8 million at the end of the prior quarter. Long-term debt (net of current portion) was $2.8 billion compared with $2.7 billion in the prior quarter.
The company generated $272.7 million of net cash from operating activities. Capital expenditures were $16 million, and free cash flow was $256.7 million. The company paid out dividends worth $58.8 million and repurchased shares worth $30 million in the reported quarter.
Booz Allen Hamilton Holding Corporation Price, Consensus and EPS Surprise
Booz Allen Hamilton Holding Corporation price-consensus-eps-surprise-chart | Booz Allen Hamilton Holding Corporation Quote
Raised Fiscal 2023 Outlook
Booz Allen currently projects revenue growth in the range of 8-10% compared with the previous projection of 5-9%. It expects adjusted EPS in the range of $4.25-$4.5 compared with the prior expectation of $4.15-$4.45 per share. The midpoint ($4.38 per share) of the revised EPS guidance is below the current Zacks Consensus Estimate of $4.43.
Adjusted EBITDA is expected to be $975-$1015 million compared with the prior anticipation of $950–$1,000 million. Adjusted EBITDA margin on revenues is anticipated in the range of high 10%-to-low 11% compared with the previous anticipation of mid-to-high 10%. Net cash provided by operating activities is expected in the range of $875-$950 million compared with the prior expectation of $850-$950 million.
Booz Allen currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Recent Performance of Some Other Business Services Companies
Equifax (EFX - Free Report) reported stellar third-quarter 2022 results, wherein both its earnings and revenues surpassed the respective Zacks Consensus Estimate.
EFX’s adjusted earnings of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. Revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year.
Omnicom (OMC - Free Report) also reported better-than-expected third-quarter 2022 results.
OMC’s earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.
The Interpublic Group of Companies (IPG - Free Report) reported third-quarter 2022 adjusted earnings of 63 cents per share, beating the Zacks Consensus Estimate by 6.8%. The bottom line has been constant on a year-over-year basis.
IPG’s net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.