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CACI International (CACI) Q3 Earnings, Revenues Top Estimates
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CACI International (CACI - Free Report) reported solid third-quarter fiscal 2018 results with healthy year-over-year increase in both earnings and revenues. The company benefited from organic revenue growth and expanding margins.
GAAP earnings for the reported quarter were $64.5 million or $2.56 per share compared with $40.4 million or $1.61 per share in the prior-year quarter. The significant year-over-year increase in GAAP earnings was primarily due to better execution of programs, notably, fixed price programs, and other one-time items including incentives..
Excluding the tax impact, earnings for the reported quarter were $2.33 per share compared with $1.61 in the year-ago quarter. The Zacks Consensus Estimate was $1.80.
Quarterly revenues were $1,241.1 million compared with $1,086.4 million in the year-ago quarter. The 3.5% revenue growth was primarily attributable to 2.7% organic growth, which increased for the fifth consecutive quarter. New business wins and on-contract growth aided organic growth. During the quarter, the company won 10 large contracts within $50 million and $150 million. The reported revenues exceeded the Zacks Consensus Estimate of $1,122 million.
Other Significant Details
Contract awards in the reported quarter were $1.4 billion, of which approximately 40% came from new businesses. Contract funding orders were $1.1 billion in the quarter. Total backlog as of Mar 31, 2018 was $11 billion. Funded backlog in Mar 31, 2018 was $1.9 billion.
In terms of customer mix, the Department of Defense accounted for about 66.5% of total revenues in the reported quarter. Federal Civilian Agencies contributed about 26.6% while Commercial and other customers accounted for 6.9% of revenues.
Operating income for the quarter came in at $104.8 million with a 55.7% increase from the year-ago quarter. Operating margin increased 225 basis points (bps) to 8.4% on the back of improving efficiency. Proper execution and performance of “fixed price and fixed unit price contracts, product sales and one-time incentive fees” aided growth.
Balance Sheet and Cash Flow
At quarter end, CACI International had cash and cash equivalents of $55.9 million with long-term debt (net of current portion) of $989.5 million.
Net cash from operations for the first nine months of fiscal 2018 was $254.5 million compared with $216.5 million a year ago.
Guidance
CACI International reiterated its guidance for fiscal 2018 that it updated on Mar 18 on the back of its impressive performance in the quarter. Revenues are expected in the range of $4.4-$4.5 billion. The Zacks Consensus Estimate is pegged at 4.46 billion.
Net income is expected in the range of $285-$291 million, up from $277-$283 million expected earlier. Earnings per share are expected in the range of $11.26- $11.50 compared with the previous expectation of $10.95-$11.19. The Zacks Consensus Estimate is pegged at $11.26 per share.
CACI International, Inc. Price, Consensus and EPS Surprise
Management is positive about the impressive third-quarter results. They are trying to take up measures that will keep visibility strong with the pipeline metrics on track.
Management is pretty confident about the “forward indicators”. Current revenue composition consists of around 99% of existing business and 1% of recompeting and new business. The company is also increasing investments in advancing machine learning and artificial intelligence for improving overall efficiency.
Backed by an enhanced solutions suite, the company intends to pursue larger bids in the catered markets, which are expected to drive the top line going ahead.
Zacks Rank and Stocks to Consider
Currently, CACI International carries a Zacks Rank #3 (Hold).
Long-term EPS growth rate for Micron, Twitter and Lam Research is projected to be 10%, 23.1% and 17.7%, respectively.
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CACI International (CACI) Q3 Earnings, Revenues Top Estimates
CACI International (CACI - Free Report) reported solid third-quarter fiscal 2018 results with healthy year-over-year increase in both earnings and revenues. The company benefited from organic revenue growth and expanding margins.
GAAP earnings for the reported quarter were $64.5 million or $2.56 per share compared with $40.4 million or $1.61 per share in the prior-year quarter. The significant year-over-year increase in GAAP earnings was primarily due to better execution of programs, notably, fixed price programs, and other one-time items including incentives..
Excluding the tax impact, earnings for the reported quarter were $2.33 per share compared with $1.61 in the year-ago quarter. The Zacks Consensus Estimate was $1.80.
Quarterly revenues were $1,241.1 million compared with $1,086.4 million in the year-ago quarter. The 3.5% revenue growth was primarily attributable to 2.7% organic growth, which increased for the fifth consecutive quarter. New business wins and on-contract growth aided organic growth. During the quarter, the company won 10 large contracts within $50 million and $150 million. The reported revenues exceeded the Zacks Consensus Estimate of $1,122 million.
Other Significant Details
Contract awards in the reported quarter were $1.4 billion, of which approximately 40% came from new businesses. Contract funding orders were $1.1 billion in the quarter. Total backlog as of Mar 31, 2018 was $11 billion. Funded backlog in Mar 31, 2018 was $1.9 billion.
In terms of customer mix, the Department of Defense accounted for about 66.5% of total revenues in the reported quarter. Federal Civilian Agencies contributed about 26.6% while Commercial and other customers accounted for 6.9% of revenues.
Operating income for the quarter came in at $104.8 million with a 55.7% increase from the year-ago quarter. Operating margin increased 225 basis points (bps) to 8.4% on the back of improving efficiency. Proper execution and performance of “fixed price and fixed unit price contracts, product sales and one-time incentive fees” aided growth.
Balance Sheet and Cash Flow
At quarter end, CACI International had cash and cash equivalents of $55.9 million with long-term debt (net of current portion) of $989.5 million.
Net cash from operations for the first nine months of fiscal 2018 was $254.5 million compared with $216.5 million a year ago.
Guidance
CACI International reiterated its guidance for fiscal 2018 that it updated on Mar 18 on the back of its impressive performance in the quarter. Revenues are expected in the range of $4.4-$4.5 billion. The Zacks Consensus Estimate is pegged at 4.46 billion.
Net income is expected in the range of $285-$291 million, up from $277-$283 million expected earlier. Earnings per share are expected in the range of $11.26- $11.50 compared with the previous expectation of $10.95-$11.19. The Zacks Consensus Estimate is pegged at $11.26 per share.
CACI International, Inc. Price, Consensus and EPS Surprise
CACI International, Inc. Price, Consensus and EPS Surprise | CACI International, Inc. Quote
Conclusion
Management is positive about the impressive third-quarter results. They are trying to take up measures that will keep visibility strong with the pipeline metrics on track.
Management is pretty confident about the “forward indicators”. Current revenue composition consists of around 99% of existing business and 1% of recompeting and new business. The company is also increasing investments in advancing machine learning and artificial intelligence for improving overall efficiency.
Backed by an enhanced solutions suite, the company intends to pursue larger bids in the catered markets, which are expected to drive the top line going ahead.
Zacks Rank and Stocks to Consider
Currently, CACI International carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Micron Technology, Inc. (MU - Free Report) , Twitter, Inc. and Lam Research Corporation (LRCX - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term EPS growth rate for Micron, Twitter and Lam Research is projected to be 10%, 23.1% and 17.7%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>