Government deals lift IT firm's earnings
Shares of CACI International jump after the information technology services company reports record results for the quarter ended Dec. 31, largely the result of federal contracts.
Amid a surge in its business with the federal government, Arlington, Va.-based CACI said its revenue for the quarter increased 26 percent year-over-year to $204.5 million and its income from continuing operations rose 45 percent year-over-year to $10.6 million, or 36 cents per diluted share. The company's net income for the quarter was $10.6 million, up from $6 million during the year-ago period.
"Like the previous quarter, this quarter was characterized by increasing levels of demand for our services by our government customers who are key in providing and supporting our nation's defense, intelligence and homeland security needs," CEO J.P. London said in a statement.
CACI's revenue from continuing operations this quarter from the Department of Defense and federal civilian agencies rose 26.7 percent year-over-year to $187.4 million. Contracts with the federal government make up 91.6 percent of CACI's revenue from continuing operations.
The company also upped its guidance for its fiscal year ending June 2003. CACI now expects to deliver diluted earnings per share for the year in the range of $1.43 to $1.48. Previously, the company had forecast diluted earnings per share in the range of $1.39 to $1.44. Prior to Thursday's revision, Wall Street analysts on average had been expecting the company to earn $1.43 for the year.
Shares of the IT services company on Thursday rose $1.73, or 4.86 percent, to close at $37.35.
CACI is one of many IT services companies gunning for a share of the government's IT budget, which is growing thanks partly to a focus on homeland security. Other companies competing for federal IT contracts include Electronic Data Systems, Computer Sciences and Accenture. The Bush Administration has proposed spending $59.1 billion on information technology in federal fiscal year 2004, a 12.4 percent increase from 2003. Federal fiscal year 2004 begins Oct. 1, 2003.
The company is hoping to get a bigger piece of the federal IT pie through acquisitions. During the past quarter, it swallowed Acton Burnell, an information technology company focused on federal government contract work whose fiscal 2002 revenue totaled $28.4 million.
On Thursday, CACI discussed another potential acquisition. It said Thursday that during the quarter it signed a letter of intent to acquire the stock of a company that provides IT and training services in support of federal military and intelligence operations and homeland security initiatives.
CACI had revenue of $681.9 million in its fiscal year 2002. It employs about 5,900 people.
CACI's shares Thursday outperformed technology stocks generally and the overall market. CNET's Tech Index rose 1.35 percent to 1,003.09, the Nasdaq composite index increased 2.12 percent to 1,388.27, and the Standard & Poor's 500 stock index added 1.02 percent to 887.34.