:max_bytes(150000):strip_icc()/INV_SAIC_Logo_GettyImages-1233676570-b4831e4b53d1460e9ae81c5c26bb6500.jpg){kind=logo}
:max_bytes(150000):strip_icc():format(jpeg)/INV_SAIC_Logo_GettyImages-1233676570-b4831e4b53d1460e9ae81c5c26bb6500.jpg){kind=logo}
Key Takeaways
- Higher divestiture and compensation costs led SAIC to miss fourth-quarter earnings estimates, and its shares sank Monday.
- The defense and government technology provider also noted that future dividend payouts would be subject to various financial metrics.
- SAIC’s shares reached a record high earlier this month, and even with Monday’s losses are up more than 20% year-over-year.
Shares of Science Applications International Corp., or SAIC (SAIC), slumped nearly 9% Monday as the defense and government technology provider posted lower-than-expected profit on higher costs—including those related to its CEO transition—and delivered a warning about its dividend.
SAIC reported fourth-quarter fiscal 2024 adjusted earnings per share (EPS) of $1.43, short of forecasts. Revenue fell 11.7% to $1.74 billion, ahead of estimates. Excluding the effect of divestitures, deconsolidation, and fewer working days, revenue rose 7.7% year-over-year.
The company noted operating income as a percentage of revenue slipped to 4.5% from 6% the prior year. It said that was primarily because of the sale of its logistics and supply chain management business, deconsolidation of Forfeiture Support Associates, and “higher incentive-based compensation expense, including acceleration of stock-based compensation related to the reorganization and executive transition, and a reserve on a customer receivable related to a program completed prior to FY2022.”
Former Chief Executive Nazzic Keene stepped down in May 2023 after serving in that role since 2019. She was replaced by current CEO Toni Townes-Whitley.
SAIC said it planned on paying out its 37-cent-per-share dividend in April, but added that “any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.”
The company also raised its full-year revenue outlook to a range of $7.35 billion to $7.50 billion from $7.25 billion to $7.40 billion previously.
SAIC shares, which were down 8.7% at $130.26 as of 3:10 p.m. ET, had hit an all-time high earlier this month, and even with Monday’s losses they have added more than 20% over the past year.