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CACI International (CACI) Beats Q2 Earnings, Guides Up

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Information technology services provider CACI International Inc. (CACI - Free Report) reported strong second-quarter fiscal 2017 results with healthy year-over-year increase in both earnings and revenues. The company benefited from increased material purchases, accelerated contract modifications, and admirable contract performance.

GAAP earnings for the reported quarter were $42.4 million or $1.69 per share compared with $30.5 million or $1.23 per share in the prior-year quarter. GAAP earnings per share comprehensively beat the Zacks Consensus Estimate of $1.42. The year-over-year increase in earnings was primarily driven by a significant improvement in revenues.

 

On adjusted basis, second-quarter fiscal 2017 earnings were $2.30 per share, up from $1.72 in the year-earlier quarter.

Quarterly revenues were $1,057.5 million compared with $830.4 million in the year-ago quarter, driven primarily by revenues of $260 million from the National Security Solutions (NSS) acquisition. The reported revenues exceeded the Zacks Consensus Estimate of $1,025 million.

Other Significant Details

Contract awards in the reported quarter were $1.6 billion, of which approximately 85% accounted for new businesses for CACI International. Contract funding orders were $752 million in the quarter. Total backlog as of Dec 31, 2016 was $11.6 billion with a funded backlog of $2 billion.

In terms of customer mix, the Department of Defense accounted for about 64.8% of the total revenue in the reported quarter. Federal Civilian Agencies contributed about 29.1%, while Commercial and other customers accounted for 6.1% of revenues.

Balance Sheet and Cash Flow

At quarter end, CACI International had cash and cash equivalents of $72.7 million with long-term debt (net of current portion) of $1,292.3 million.

Net cash from operations for the first six months of fiscal 2017 was $135.4 million compared with $135.6 million in the year-ago period.

CACI International, Inc. Price, Consensus and EPS Surprise

 

CACI International, Inc. Price, Consensus and EPS Surprise | CACI International, Inc. Quote

Guidance Raised

CACI International raised its earlier guidance for fiscal 2017 on improved growth dynamics. Revenues are expected in the range of $4,150–$4,300 million (earlier expectation was $4,050 million–$4,250 million). Net income is expected in the range of $155–$162 million (earlier expected range was $150 million–$160 million), resulting in earnings per share of $6.18–$6.45 (earlier expectation was $5.98–$6.37).

Moving ahead, CACI International expects to diligently focus on its operating plans to reward shareholders with attractive risk-adjusted returns. The company remains confident about its competitive position and continued ability to meet customer requirements through the delivery of innovative, affordable solutions and services.

CACI International currently has a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Stocks to Consider

Some other favorably ranked stocks in the space include Barracuda Networks, Inc. , Science Applications International Corporation (SAIC - Free Report) and SecureWorks Corp. (SCWX - Free Report) . All three stocks carry the same Zacks Rank as CACI.

Barracuda has long-term earnings growth expectations of 21.31% and is currently trading at a forward P/E of 67.11x.

SecureWorks has long-term earnings growth expectations of 25% and it beat estimates twice in the trailing four quarters with an average positive surprise of 34.21%.

Science Applications has long-term earnings growth expectations of 5% and is currently trading at a forward P/E of 24.20x.

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