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CACI International (CACI) Q3 Earnings Miss Estimates, Up Y/Y
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CACI International (CACI - Free Report) reported third-quarter fiscal 2020 (ended Mar 31, 2020) results, wherein earnings missed estimates but revenues beat the same.
Earnings were $3.16 per share, up 17.6% year over year. However, the bottom line missed the Zacks Consensus Estimate by 2.47%.
Revenues were $1.47 billion, up 15.9% from the year-ago quarter. The rise was primarily attributable to new business wins, acquired contracts and on-contract growth, which aided organic expansion. The top line also outpaced the consensus mark of $1.45 billion.
CACI International, Inc. Price, Consensus and EPS Surprise
Contract awards in the reported quarter were worth $1.4 billion, a 45.7% year-over-year decline, of which approximately 50% came from new businesses. Revenues from contract awards excluded ceiling values of multi-award, indefinite-delivery, indefinite-quantity contracts.
Total backlog, as of Mar 31, 2020, was $19.9 billion, 34% higher than the prior-year quarter. Funded backlog at the end of March was $3 billion, up 3%.
In terms of customer mix, the Department of Defense accounted for 70.8% of total revenues in the quarter. Federal Civilian Agencies contributed about 24.7%, while Commercial and other customers accounted for 4.6% of revenues.
Revenues generated as a prime contractor and a subcontractor accounted for 91.7% and 8.3% of total revenues, respectively.
Moreover, in terms of contract type, cost reimbursable type contracts fetched 58.2%, fixed-price contracts accounted for 27.7%, and time and material type contracts accounted for 14.1% of total revenues.
Margins
Operating income for the quarter came in at $113.7 million, up 19.8% from the year-ago quarter.
Operating income margin expanded 30 basis points (bps) to 7.8%. Higher interest expenses were an overhang on margins.
Adjusted EBITDA for the fiscal second quarter increased 19.9% year over year to $141.4 million. Adjusted EBITDA margin of 9.7% expanded 40 bps.
Balance Sheet and Cash Flow
At the quarter-end, CACI had cash and cash equivalents of $77.2 million compared with $68.6 million in the previous quarter.
Total long-term (net of current portion) debt was $1.46 billion.
Cash flow from operations, as of Mar 31, was $357.8 million compared with $237 million in the previous quarter. The increase was driven by growth in net income combined with lower DSO.
Guidance
CACI reiterated its guidance for fiscal 2020. Revenues are expected in the range of $5.60-$5.80 billion. Earnings per share are expected between $11.91 and $12.70.
Net income is expected in the range of $305-$325 million. Moreover, net cash provided by operating activities is expected to be at least $430 million.
The company expects to accelerate organic revenue growth and continued margin expansion throughout 2020.
Zacks Rank & Key Picks
The company currently carries a Zacks Rank #3 (Hold).
Long-term earnings growth rate for Zoom, Pixelworks and Avid is currently pegged at 26.56%, 20% and 20%, respectively.
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CACI International (CACI) Q3 Earnings Miss Estimates, Up Y/Y
CACI International (CACI - Free Report) reported third-quarter fiscal 2020 (ended Mar 31, 2020) results, wherein earnings missed estimates but revenues beat the same.
Earnings were $3.16 per share, up 17.6% year over year. However, the bottom line missed the Zacks Consensus Estimate by 2.47%.
Revenues were $1.47 billion, up 15.9% from the year-ago quarter. The rise was primarily attributable to new business wins, acquired contracts and on-contract growth, which aided organic expansion. The top line also outpaced the consensus mark of $1.45 billion.
CACI International, Inc. Price, Consensus and EPS Surprise
CACI International, Inc. price-consensus-eps-surprise-chart | CACI International, Inc. Quote
Quarter Details
Contract awards in the reported quarter were worth $1.4 billion, a 45.7% year-over-year decline, of which approximately 50% came from new businesses. Revenues from contract awards excluded ceiling values of multi-award, indefinite-delivery, indefinite-quantity contracts.
Total backlog, as of Mar 31, 2020, was $19.9 billion, 34% higher than the prior-year quarter. Funded backlog at the end of March was $3 billion, up 3%.
In terms of customer mix, the Department of Defense accounted for 70.8% of total revenues in the quarter. Federal Civilian Agencies contributed about 24.7%, while Commercial and other customers accounted for 4.6% of revenues.
Revenues generated as a prime contractor and a subcontractor accounted for 91.7% and 8.3% of total revenues, respectively.
Moreover, in terms of contract type, cost reimbursable type contracts fetched 58.2%, fixed-price contracts accounted for 27.7%, and time and material type contracts accounted for 14.1% of total revenues.
Margins
Operating income for the quarter came in at $113.7 million, up 19.8% from the year-ago quarter.
Operating income margin expanded 30 basis points (bps) to 7.8%. Higher interest expenses were an overhang on margins.
Adjusted EBITDA for the fiscal second quarter increased 19.9% year over year to $141.4 million. Adjusted EBITDA margin of 9.7% expanded 40 bps.
Balance Sheet and Cash Flow
At the quarter-end, CACI had cash and cash equivalents of $77.2 million compared with $68.6 million in the previous quarter.
Total long-term (net of current portion) debt was $1.46 billion.
Cash flow from operations, as of Mar 31, was $357.8 million compared with $237 million in the previous quarter. The increase was driven by growth in net income combined with lower DSO.
Guidance
CACI reiterated its guidance for fiscal 2020. Revenues are expected in the range of $5.60-$5.80 billion. Earnings per share are expected between $11.91 and $12.70.
Net income is expected in the range of $305-$325 million. Moreover, net cash provided by operating activities is expected to be at least $430 million.
The company expects to accelerate organic revenue growth and continued margin expansion throughout 2020.
Zacks Rank & Key Picks
The company currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are Zoom Video Communications, Inc. (ZM - Free Report) , Pixelworks, Inc. (PXLW - Free Report) and Avid Technology, Inc. , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Zoom, Pixelworks and Avid is currently pegged at 26.56%, 20% and 20%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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