SAIC Inc. (SAI) Thursday reported a decline in profit for the first quarter, as margins were impacted by higher expenses. Nevertheless, both earnings and revenues for the quarter came in ahead of analysts' expectations. Moving forward, the defense contractor backed its financial guidance for fiscal year 2013.
Operating margin for the quarter dropped to 7.5 percent from 8.6 percent last year, hurt mainly by increased indirect spending and reduction in net positive changes in contract estimates.
Cost of revenues increased to $2.45 billion from $2.36 billion last year, while selling, general and administrative expenses rose to $126 million from $101 million last year.
Revenues for the first quarter grew 3 percent to $2.78 billion from $2.69 billion last year. Wall Street analysts on consensus estimated revenues of $2.69 billion for the quarter.
Chief Executive John Jumper said, "Our performance for the quarter reflects a combination of pressures we are seeing in the market and internal investments being made to prepare for the future. Despite these two factors, I am pleased we delivered positive revenue growth for the quarter..."
SAIC's net income for the first quarter dropped to $114 million or $0.35 per share from $127 million or $0.36 per share last year. On average, 14 analysts polled by Thomson Reuters expected earnings of $0.33 per share for the quarter.
Net business bookings totaled $2.1 billion in the first quarter, representing a book-to-bill ratio of 0.8.
Looking forward to fiscal year 2013, the company still expect earnings from continuing operations in a range of $1.26 to $1.36 per share and revenues of $10.7 billion to $11.2 billion. Analysts currently expect earnings of $1.33 per share on revenues of $10.79 billion for fiscal year 2013.
SAI closed Thursday's trading on the NYSE at $11.11, up 0.27%, on a volume of about 5.5 million shares.
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