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CACI International Inc (CACI - Analyst Report) reported strong third quarter fiscal 2013 results (ended Mar 31, 2013) with earnings of $1.62 per share compared to $1.37 in the year-earlier quarter. The year-over-year increase in earnings was driven by high share repurchase activities. However, net income for the reported quarter decreased 0.5% year over year to $38.4 million.

On a non-GAAP basis, adjusted earnings stood at $2.08 per share versus $1.83 per share in the year-ago quarter. The adjusted earnings beat the Zacks Consensus Estimate of $1.65.

Revenues came in at $906.2 million, down 2.3% year over year due to continued troubles in Afghanistan, partially offset by an increase in direct labor. The quarterly sales missed the Zacks Consensus Estimate of $941 million.

Contract funding orders aggregated $655 million for the quarter, bringing year-to-date tally to $2.69 billion. Total backlog at Mar 31, 2013 was $7.2 billion while funded backlog was $1.9 billion.

In terms of customer mix, the Department of Defense accounted for about 73.7% of total revenue in the reported quarter. Federal Civilian Agencies contributed about 20.5%, while Commercial customers accounted for 5.3% and State and Local Governments added 0.5% to total revenue.

Operating income stood at $68.6 million in the reported quarter versus $69 million in the year ago quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at $83.1 million versus $82.9 million in the year ago quarter.

Significant Quarter Developments

CACI International received $555 million worth of contract awards in the quarter, up 1.5% from the year-ago quarter. During the reported quarter, CACI International procured awards in all ten markets with approximately one-third in the high-growth markets of Business Systems, Cyberspace, Healthcare and Integrated Security Solutions.

During the reported quarter, CACI International was selected as one of the primary contractors for $21 million contract to provide educational support to the National Defense University (NDU). Additionally, an $11 billion, five-year contract was obtained to support the Department of Homeland Security on the technical, acquisition and business support services.

Balance Sheet and Cash Flows

The company ended the quarter with cash and cash equivalents of $56.2 million. Long-term debt totaled $677.0 million, up from $527.3 million at June 30, 2012.

In the third quarter of fiscal 2013, net cash provided by operating activities was $142.4 million versus $144.8 million in the previous-year period.

Outlook

The company revised its guidance for fiscal 2013. The company decreased its net income guidance from $157 million to $163 million to the range of $151 million to $157 million. Revenues are projected to be between $3,650 million and $3,750 million, down from the earlier projections of $3,700 million and $3,900 million. Earnings are expected to be within $6.29 and $6.55 per share, down from the earlier guidance of $6.54 and $6.79 in fiscal 2013.

Moving ahead, CACI international remains focused on its strategy to grow in large markets, increase new business initiatives, drive operational excellence, and leverage mergers and acquisitions to further increase its market share and create long-term value for its shareholders.

CACI International currently has a Zacks Rank #4 (Sell). Other stocks that look promising and are worth considering in the industry are CSG Systems International Inc (CSGS - Snapshot Report). Innodata Inc (INOD - Snapshot Report) and Perficient Inc (PRFT), each carrying a Zacks Rank #1 (Strong Buy).

 

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