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Booz Allen (BAH) Q1 Earnings Beat Estimates, Increase Y/Y

Booz Allen Hamilton Holding Corp. BAH reported impressive first-quarter fiscal 2023 results with both earnings and revenues beating the Zacks Consensus Estimate. However, the better-than-expected results failed to impress the market as there has not been any major price change since the earnings release on Jul 29.

The stock appreciated 17.3% over the past year, outperforming the 4.4% rise of the industry it belongs to.

Quarterly adjusted earnings per share of $1.13 beat the consensus mark by 6.6% and increased 5.6% on a year-over-year basis.

Revenues, Backlog & Headcount Increase Y/Y

Total revenues of $2.3 billion beat the Zacks Consensus Estimate by 3% and increased 13.1% on a year-over-year basis. Revenues, excluding billable expenses, were $1.6 billion, up 9.9% on a year-over-year basis. Billable expenses contributed 30% to revenues.

Total backlog increased 6.8% from the prior-year quarter’s reported figure to $28.6 billion. The funded backlog of $4 billion increased 15.1% year over year. Unfunded backlog was up 10.7% to $10 billion. Priced options were up 2.3% to $14.6 billion. Book-to-bill ratio was 0.72, down 44.6% year over year. The headcount of 29,291 increased 2.6% year over year.

Margins Decline

Adjusted EBITDA amounted to $252.6 million, up 6.1% year over year. Adjusted EBITDA margin on revenues was 11.2%, down from the year-ago quarter’s 12%. Adjusted EBITDA margin on revenues, excluding billable expenses, decreased to 16% from 16.6% in the year-ago quarter.

Key Balance Sheet & Cash Flow Numbers

Booz Allen Hamilton exited the quarter with cash and cash equivalents of $497.8 million compared with $695.9 million at the end of the prior quarter. Long-term debt (net of current portion) was $2.7 billion compared with $2.8 billion in the prior quarter.

The company used $45.6 million of net cash in operating activities. Capital expenditures were $13.7 million and free cash flow was $59.4 million. The company paid out dividends worth $58.9 million and repurchased shares worth $73.4 million in the reported quarter.

Reaffirmed Fiscal 2023 Outlook

Booz Allen currently projects revenue growth in the range of 5-9%. It expects adjusted EPS in the range of $4.15-$4.45 per share. The Zacks Consensus Estimate is now anticipated to be $4.36.

Adjusted EBITDA is expected to be $950–$1,000 million. Adjusted EBITDA margin on revenues is anticipated in the range of mid-to-high 10%. Net cash provided by operating activities is expected in the range of $850-$950 million.

Booz Allen Hamilton currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Booz Allen Hamilton Holding Corporation Price, Consensus and EPS Surprise

Booz Allen Hamilton Holding Corporation Price, Consensus and EPS Surprise
Booz Allen Hamilton Holding Corporation Price, Consensus and EPS Surprise

Booz Allen Hamilton Holding Corporation price-consensus-eps-surprise-chart | Booz Allen Hamilton Holding Corporation Quote

Performances of Some Other Business Services Companies

Equifax EFX reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.

EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.

IQVIA Holdings IQV reported solid second-quarter 2022 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.

IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.

Omnicom Group OMC reported impressive second-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.


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