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Booz Allen (BAH) Stock Down 4% Despite Q1 Earnings Beat

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Booz Allen Hamilton Holding Corp. (BAH - Free Report) reported mixed first-quarter fiscal 2022 results with earnings beating the Zacks Consensus Estimate but revenues missing the same.

The earnings beat failed to impress the market, with the stock slipping 3.6% since the earnings release. The stock declined 5% in the year-to-date period against 12.5% rally of the industry it belongs to.

Quarterly adjusted earnings per share of $1.07 beat the consensus mark by 11.5% and increased 15.1% on a year-over-year basis. The bottom line benefited from solid top-line growth and strong margin performance.

Revenues, Backlog & Headcount Increase Y/Y

Total revenues of $2 billion missed the Zacks Consensus Estimate by 1.6% but increased 1.7% on a year-over-year basis. Revenues, excluding billable expenses, were $1.4 billion, up 1.9% on a year-over-year basis. Billable expenses contributed 27.9% to revenues.

Total backlog increased 16.5% from the prior-year quarter’s reported figure to $26.8 billion. Funded backlog of $3.5 billion increased 1.6% year over year. Unfunded backlog was up 90.7% to $9 billion. Priced options were down 3.7% to $14.3 billion. Book-to-bill ratio was 1.3, down 40.1% year over year. Headcount of 28,558 increased 4.3% year over year.

Strong Margin Performance

Adjusted EBITDA amounted to $238.1 million, up 11.8% year over year. Adjusted EBITDA margin on revenues was 12%, up from the year-ago quarter’s figure of 10.9%. Adjusted EBITDA margin on revenues, excluding billable expenses, increased to 16.6% from 15.1% in the year-ago quarter.

Key Balance Sheet & Cash Flow Numbers

Booz Allen Hamilton exited fiscal fourth quarter with cash and cash equivalents of $621.9 million compared with $991 million at the end of the prior quarter. Long-term debt (net of current portion) was $2.8 billion compared with $2.3 billion in the prior quarter.

The company used $10.7 million of net cash in operating activities. Capital expenditures were $9 million and free cash flow was $19.7 million. The company paid out dividends worth $51.6 million and repurchased shares worth $123.8 million in the reported quarter.

Reaffirmed Fiscal 2022 Outlook

Booz Allen Hamilton continues to project revenue growth for fiscal 2022 at 7-10% range. Adjusted EBITDA margin on revenues is anticipated to be in mid-10% range. Net cash provided by operating activities is expected in the range of $800-$850 million.

Booz Allen Hamilton currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Some Other Business Services Companies

Equifax (EFX - Free Report) reported better-than-expected second-quarter 2021 results. Adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and improved 23.8% on a year-over-year basis. Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and improved 25.6% year over year.

IHS Markit’s (INFO - Free Report) second-quarter fiscal 2021 adjusted earnings per share of 81 cents beat the consensus mark by 1.3% and increased 17.4% on a year-over-year basis. Total revenues came in at $1.2 billion, surpassing the consensus mark by 3.8% and increasing 15% from the year-ago quarter.

Omnicom (OMC - Free Report) reported second-quarter 2021 adjusted earnings of $1.46 per share that beat the consensus mark by 9.8% and increased 58.7% year over year. Total revenues of $3.6 billion surpassed the consensus estimate by 6.7% and increased 27.5% year over year.