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Things to Note Ahead of Science Applications (SAIC) Q1 Earnings

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Science Applications International Corporation (SAIC - Free Report) is set to report first-quarter fiscal 2023 earnings on Jun 6.

The company’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 8.83%.

For the fiscal first quarter, the Zacks Consensus Estimate for revenues is pegged at $1.93 billion, indicating a 2.8% improvement from the year-ago quarter’s reported figure. For earnings, the consensus mark stands at $1.78 per share, suggesting a decline of 8.3% from the prior-year quarter’s reported number.

Let’s see how things have shaped up for the upcoming announcement.

Factors to Consider

Science Applications’ first-quarter fiscal 2023 results are likely to reflect key contract wins, driven by a strong product portfolio. The higher demand for its technology solutions due to the ongoing digital transformation wave across the defense, space, intelligence and civilian markets is likely to have aided SAIC’s first-quarter performance.

The company’s capability to sustain its existing contracts, along with newly awarded ones across the customer portfolio, might have acted as a tailwind. The strong demand for Science Applications’ IT modernization services, which include advanced analytics, software and app modernization and cloud migration, may have favored the performance in the quarter to be reported.

The acquisition of Halfaker and Associates may have resulted in incremental revenues in the quarter under review. The acquisition of Koverse is expected to have continued aiding revenue growth in this quarter as well.

However, Science Applications’ supply-chain portfolio is likely to have continued to be affected by the impacts of the pandemic and ongoing geopolitical issues worldwide. This is expected to have been an overhang on the top line during the quarter under review.

Additionally, the rising component costs, along with increasing labor and logistics expenses, are anticipated to have negatively impacted SAIC’s bottom line in the first quarter.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Science Applications this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Science Applications currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Per our model, Commercial Metals (CMC - Free Report) , The Kroger Company (KR - Free Report) and Smartsheet (SMAR - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.

Commercial Metals carries a Zacks Rank #2 and has an Earnings ESP of +8.63%. The company is scheduled to report third-quarter fiscal 2022 results on Jun 16. Commercial Metals’ earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 16%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CMC’s third-quarter earnings is pegged at $1.97 per share, indicating a year-over-year increase of 89.4%. The consensus mark for revenues stands at $2.34 billion, suggesting a year-over-year increase of 26.9%.

Kroger currently carries a Zacks Rank #2 and has an Earnings ESP of +2.95%. The company is anticipated to report its first-quarter fiscal 2023 results on Jun 16. Kroger’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 22.1%.

The Zacks Consensus Estimate for Kroger’s first-quarter earnings stands at $1.27 per share, implying a year-over-year increase of 6.7%. KR is estimated to report revenues of $43.22 billion, suggesting growth of 4.7% from the year-ago quarter.

Smartsheet is set to report first-quarter fiscal 2023 results on Jun 7. The company carries a Zacks Rank #3 and has an Earnings ESP of +1.89% at present. Smartsheet’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 47.5%.

The Zacks Consensus Estimate is pegged at a loss of 19 cents per share, wider than the year-ago quarter’s loss of nine cents. SMAR’s quarterly revenues are estimated to increase by 38.8% year over year to $162.5 million.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.