CACI International (CACI - Free Report) reported second-quarter fiscal 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
The company reported non-GAAP earnings of $4.39 per share surpassing the Zacks Consensus Estimate of $3.99 per share. The bottom line declined 6.4% from the year-ago quarter’s figure of $4.69 per share.
This decline in earnings was primarily due to lower operational income, high interest expenses and tax rates partially offset by a reduced number of shares outstanding. Reduction in shares outstanding can be attributed to the stock buyback worth $500 million under the accelerated share repurchase program announced in March 2021.
In the second quarter fiscal 2022, CACI reported revenues of $1.49 billion, missing the Zacks Consensus Estimate of $1.53 billion. However, the top line increased 1.2% from the prior-year quarter. Organic revenues improved 1% on a year-over-year basis.
Quarterly Details
Contract awards during the second quarter totaled $1.95 billion. The figure decreased 8.3% on a year-over-year basis. Revenues from contract awards exclude ceiling values of multi-award, indefinite-delivery, indefinite-quantity contracts.
CACI ended the quarter with a backlog of $24.1 billion, up 8% on a year-over-year basis. As of Dec 31, 2021, the funded backlog increased 7% to $3.1 billion.
In terms of customer mix, the Department of Defense contributed 69.8% to total revenues in the reported quarter. Federal Civilian Agencies made up 25%, while Commercial and other customers accounted for 5.2% of revenues.
Revenues generated as a prime contractor and a subcontractor accounted for 89.9% and 10.1% of total revenues, respectively.
In terms of contract type, cost-plus-fee type contracts, fixed-price contracts, and time and material type contracts contributed 59.9%, 28.3% and 11.8% to total revenues, respectively.
Revenues generated as ‘Expertise’ and ‘Technology’ accounted for 46.2% and 53.8% of total revenues, respectively.
Operating Details
Operating income for the quarter amounted to $124 million, down 12.3% year over year. Operating margin contracted 120 basis points (bps) to 8.4%. The company cited abnormally high profit margin in the prior-year quarter as the primary reason behind this decline. The downside was due to the pandemic-led lower travel & medical expenses and reduced delivery costs under the fixed price program last year.
Adjusted EBITDA slumped 9.5% year over year to $158 million. Adjusted EBITDA margin of 10.6% fell 130 bps.
Balance Sheet & Cash Flow
As of Dec 31 2021, CACI had cash and cash equivalents of $124.1 million compared with the previous quarter’s $104.4 million. Total long-term (net of current portion) debt was $2.08 billion, up from $1.65 billion as of Sep 30, 2021.
The company generated an operating cash flow (excluding MARPA) of $128.9 million during the second quarter, plunging 32.1% from the year-ago quarter. The decline was due to a $21 million gain from payroll tax deferral in the year-ago quarter under the CARES Act and a $47 million deferred payroll tax repayment in the current quarter.
During the first half of fiscal 2022, CACI generated $303.3 million of operating cash flow (excluding MARPA).
Free cash flow was $117.4 million during the quarter under review and $281.7 million in the first half of fiscal 2022.
Guidance Update
CACI updates its fiscal 2022 guidance. The company now projects revenues between $6.300 billion and $6.400 billion compared with the prior range of $6.200-$6.400 billion. Adjusted earnings are forecast between $18.14 and $18.57 per share compared with the earlier guidance of $18-$18.83 per share.
The company now expects a fiscal 2022 net income of $430-440 million compared with the prior range of $430-450 million. However, it still estimates free cash flow to be at least $720 million.
It continues to anticipate solid organic revenue growth and continued margin expansion throughout 2022.
Zacks Rank & Other Key Picks
CACI currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader computer and technology sector include the largest global Customer Relationship Management vendor Salesforce (CRM - Free Report) flaunting a Zacks Rank #1 (Strong Buy), the graphic processing unit maker NVIDIA Corporation (NVDA - Free Report) and Advanced Micro Devices (AMD - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s fourth-quarter fiscal 2022 earnings has been revised downward by 7.6% to 73 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by 0.43% to $4.68 per share in the last 60 days.
Salesforce’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 44.2%. CRM stock has depreciated 6.1% in the past year.
The Zacks Consensus Estimate for NVIDIA’s fourth-quarter fiscal 2022 earnings has been revised upward by 13 cents to $1.22 per share over the past 90 days. For fiscal 2022, earnings estimates have moved north by 19 cents to $4.33 per share in the past 90 days.
NVIDIA’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of NVDA have soared 76.3% in the past year.
The Zacks Consensus Estimate for Advanced Micro Devices’ fourth-quarter 2021 earnings has been revised upward by 7 cents to 75 cents per share over the past 90 days. For 2021, earnings estimates have moved north by 0.38% to $2.65 per share in the last 60 days.
Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 14%. Shares of AMD have rallied 24.6% in the past year.
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CACI International (CACI - Free Report) reported second-quarter fiscal 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
The company reported non-GAAP earnings of $4.39 per share surpassing the Zacks Consensus Estimate of $3.99 per share. The bottom line declined 6.4% from the year-ago quarter’s figure of $4.69 per share.
This decline in earnings was primarily due to lower operational income, high interest expenses and tax rates partially offset by a reduced number of shares outstanding. Reduction in shares outstanding can be attributed to the stock buyback worth $500 million under the accelerated share repurchase program announced in March 2021.
In the second quarter fiscal 2022, CACI reported revenues of $1.49 billion, missing the Zacks Consensus Estimate of $1.53 billion. However, the top line increased 1.2% from the prior-year quarter. Organic revenues improved 1% on a year-over-year basis.
Quarterly Details
Contract awards during the second quarter totaled $1.95 billion. The figure decreased 8.3% on a year-over-year basis. Revenues from contract awards exclude ceiling values of multi-award, indefinite-delivery, indefinite-quantity contracts.
CACI ended the quarter with a backlog of $24.1 billion, up 8% on a year-over-year basis. As of Dec 31, 2021, the funded backlog increased 7% to $3.1 billion.
In terms of customer mix, the Department of Defense contributed 69.8% to total revenues in the reported quarter. Federal Civilian Agencies made up 25%, while Commercial and other customers accounted for 5.2% of revenues.
Revenues generated as a prime contractor and a subcontractor accounted for 89.9% and 10.1% of total revenues, respectively.
In terms of contract type, cost-plus-fee type contracts, fixed-price contracts, and time and material type contracts contributed 59.9%, 28.3% and 11.8% to total revenues, respectively.
Revenues generated as ‘Expertise’ and ‘Technology’ accounted for 46.2% and 53.8% of total revenues, respectively.
Operating Details
Operating income for the quarter amounted to $124 million, down 12.3% year over year. Operating margin contracted 120 basis points (bps) to 8.4%. The company cited abnormally high profit margin in the prior-year quarter as the primary reason behind this decline. The downside was due to the pandemic-led lower travel & medical expenses and reduced delivery costs under the fixed price program last year.
Adjusted EBITDA slumped 9.5% year over year to $158 million. Adjusted EBITDA margin of 10.6% fell 130 bps.
Balance Sheet & Cash Flow
As of Dec 31 2021, CACI had cash and cash equivalents of $124.1 million compared with the previous quarter’s $104.4 million. Total long-term (net of current portion) debt was $2.08 billion, up from $1.65 billion as of Sep 30, 2021.
The company generated an operating cash flow (excluding MARPA) of $128.9 million during the second quarter, plunging 32.1% from the year-ago quarter. The decline was due to a $21 million gain from payroll tax deferral in the year-ago quarter under the CARES Act and a $47 million deferred payroll tax repayment in the current quarter.
During the first half of fiscal 2022, CACI generated $303.3 million of operating cash flow (excluding MARPA).
Free cash flow was $117.4 million during the quarter under review and $281.7 million in the first half of fiscal 2022.
Guidance Update
CACI updates its fiscal 2022 guidance. The company now projects revenues between $6.300 billion and $6.400 billion compared with the prior range of $6.200-$6.400 billion. Adjusted earnings are forecast between $18.14 and $18.57 per share compared with the earlier guidance of $18-$18.83 per share.
The company now expects a fiscal 2022 net income of $430-440 million compared with the prior range of $430-450 million. However, it still estimates free cash flow to be at least $720 million.
It continues to anticipate solid organic revenue growth and continued margin expansion throughout 2022.
Zacks Rank & Other Key Picks
CACI currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader computer and technology sector include the largest global Customer Relationship Management vendor Salesforce (CRM - Free Report) flaunting a Zacks Rank #1 (Strong Buy), the graphic processing unit maker NVIDIA Corporation (NVDA - Free Report) and Advanced Micro Devices (AMD - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s fourth-quarter fiscal 2022 earnings has been revised downward by 7.6% to 73 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by 0.43% to $4.68 per share in the last 60 days.
Salesforce’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 44.2%. CRM stock has depreciated 6.1% in the past year.
The Zacks Consensus Estimate for NVIDIA’s fourth-quarter fiscal 2022 earnings has been revised upward by 13 cents to $1.22 per share over the past 90 days. For fiscal 2022, earnings estimates have moved north by 19 cents to $4.33 per share in the past 90 days.
NVIDIA’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of NVDA have soared 76.3% in the past year.
The Zacks Consensus Estimate for Advanced Micro Devices’ fourth-quarter 2021 earnings has been revised upward by 7 cents to 75 cents per share over the past 90 days. For 2021, earnings estimates have moved north by 0.38% to $2.65 per share in the last 60 days.
Advanced Micro Devices’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 14%. Shares of AMD have rallied 24.6% in the past year.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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