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CACI International (CACI) Q3 Earnings Top Estimates, Revenues Miss

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CACI International CACI reported better-than-anticipated bottom-line results for third-quarter fiscal 2021 (ended Mar 31, 2021). Quarterly earnings came in at $5.28 per share, beating the Zacks Consensus Estimate by 43%. The earnings figure also jumped 47.1% year over year.

Revenues came in at $1.55 billion in the fiscal third quarter, up 5.9% from the year-ago quarter’s reported figure. This upside can be primarily attributed to new business wins, acquired contracts and on-contract growth. The company registered organic revenue growth of 5.3% in the fiscal third quarter. However, the top-line figure missed the consensus mark of $1.58 billion.

CACI International, Inc. Price, Consensus and EPS Surprise

CACI International, Inc. Price, Consensus and EPS Surprise
CACI International, Inc. Price, Consensus and EPS Surprise

CACI International, Inc. price-consensus-eps-surprise-chart | CACI International, Inc. Quote

Quarter Details

Contract awards in the reported quarter were worth $1.6 billion. Revenues from contract awards do not include ceiling values of multi-award, indefinite-delivery, indefinite-quantity contracts.

Total backlog, as of Mar 31, 2021, was $22.3 billion, 12.3% higher than the prior-year quarter’s level. Funded backlog at the end of March 2021 was $3 billion, up 1.3%.

In terms of customer mix, the Department of Defense contributed 69.2% to total revenues in the reported quarter. Federal Civilian Agencies contributed 26.2%, while Commercial and other customers accounted for 4.6% of revenues.

Revenues generated as a prime contractor and a subcontractor accounted for 90.3% and 9.7% of total revenues, respectively.

In terms of contract type, cost-plus-fee type contracts contributed 58.3%, fixed-price contracts contributed 29.5% and time and material type contracts contributed 12.2% to total revenues.

Margins

Operating income for the fiscal third quarter came in at $151.4 million, up 33.2% from the year-earlier quarter’s figure. This upswing resulted from higher revenues, favorable fixed-price contract performance, strong operating performance and lower indirect costs. Operating income margin expanded 200 basis points (bps) to 9.8%.

Adjusted EBITDA for the fiscal third quarter climbed 29.9% year over year to $183.7 million. Adjusted EBITDA margin of 11.8% advanced 210 bps.

Balance Sheet and Cash Flow

At the end of the fiscal third quarter, CACI International had cash and cash equivalents of $105.6 million compared with the previous quarter’s $102.1 million.

Total long-term (net of current portion) debt was $1.78 billion.

During the first nine months of fiscal 2021, the company generated a cash flow of $500.5 million from operational activities.

Guidance

Due to significant impacts of COVID-related disruptions, including travel restrictions, reduction in government processing of deployment orders and delays in task orders, CACI reduced its full-year fiscal 2021 revenue guidance. Revenues are now projected at $6 - $6.08 billion, down from the previous outlook of $6.05-$6.25 billion.

However, guidance for earnings per share was raised to reflect strong operating performance, lower program and indirect expenses, and certain tax benefits. Earnings per share are now estimated between $18 and $18.4, up from the previously guided range of $14.47-$15.25.

The company raised the net income guidance of $372-$392 million to $450-$460 million.

Notably, net cash provided by operating activities is still estimated to be at least $600 million.

The company continues to anticipate solid organic revenue growth and continued margin expansion throughout 2021.

Zacks Rank & Other Stocks to Consider

CACI currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader technology sector are NVIDIA Corporation NVDA, Micron Technology, Inc. MU and Etsy, Inc. ETSY, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for NVIDIA, Micron and Etsy is currently pegged at 15.05%, 15.66% and 19.43%, respectively.

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