Tuesday, SI International, Inc. (SINT), an information technology and network solutions company, reported a decline in second quarter profit on higher expenses, despite a 20% increase in revenue. The company also provided guidance for the third and fourth quarters, and revised the forecast for fiscal 2008.
Net income for the second quarter ended June 28, 2008 slid to $3.8 million from $5.0 million in the previous year. Earnings per share declined to $0.29 from $0.39 in the prior-year period. Nine analysts surveyed by First Call/Thomson Financial expected the company to earn $0.29 per share for the quarter.
Revenue for the second quarter was $142.8 million, up 20% over $118.8 million reported in the prior-year quarter. Federal government contract revenue represented 99% of the second quarter revenue, the company noted. Seven analysts had a revenue consensus estimate of $136.41 million for the quarter.
Second quarter results were driven by growth in high-priority Federal government assignments primarily with civilian agencies and the acquisition of LOGTEC, Inc. at the beginning of June 2007, the company said. Backlog as of June 28, 2008 amounted to about $1.57 billion.
Total operating expenses for the second quarter increased to $135 million from $109 million last year, dragging down the operating income to $8.1 million from $9.8 million posted in the prior-year quarter.
For the six-month period net income declined to $7.3 million or $0.55 per share from $9.8 million or $0.74 per share reported a year earlier. Revenue climbed to $277.2 million, from $232.5 million for the first half of the previous year.
Looking ahead, for the third quarter, the company expects net income to be between $3.9 and $4.3 million. Earnings per share are expected to be between $0.30 and $0.33 per share, and revenue is projected in the range of $147 million to $153 million. Currently, Street analysts expect the company to earn $0.40 per share on revenues of $147.78 million.
For the fourth quarter net income is projected to be between $4.2 and $4.8 million. Earnings per share are estimated between $0.33 and $0.38 and revenues in $147 million - $152 million range.
Going forward, the company revised its full-year guidance to reflect greater than expected start-up costs associated with the Enterprise Program Management contracts and a large reduction in volume with the Patent and Trademark Office contract.
For all of 2008, SI currently expects net income to be in $15.4 million - $16.4 million range, earnings per share to be between $1.18 and $1.26, and revenue in $570 million - $580 million range.
Earlier, the company expected net income of between $18.9 million and $20.2 million. Earnings per share were projected in $1.40 - $1.50 range and revenues between $560 million and $580 million.
Currently, analysts surveyed by First Call expect the company to earn $1.41 per share on revenues of $565.87 million for fiscal 2008.
SINT closed Monday's regular trading session at $23.08.
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