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What's in Store for Science Applications (SAIC) Q1 Earnings?

Zacks Equity Research

Science Applications International Corporation SAIC is set to report first-quarter fiscal 2021 earnings on Jun 4.

The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed in the remaining one, the average positive surprise being 8.73%.

For the fiscal first quarter, the Zacks Consensus Estimate for revenues is pegged at $1.73 billion, indicating a 6.92% improvement from the year-ago quarter’s reported figure. For earnings, the consensus mark stands at $1.41 per share, suggesting a rise of 3.68% from the prior-year quarter’s reported number.

Let’s see how things are shaping up for the upcoming announcement.

Science Applications International Corporation Price and EPS Surprise

Science Applications International Corporation Price and EPS Surprise
Science Applications International Corporation Price and EPS Surprise

Science Applications International Corporation price-eps-surprise | Science Applications International Corporation Quote

Factors at Play

Science Applications’ first-quarter fiscal 2021 results are likely to have benefited from a strong product portfolio, which is aiding contract wins. The company’s capability to sustain its existing contracts along with the newly-awarded ones across the customer portfolio is likely to have been a steady tailwind.

Notably, the company won more than $650 million in national security contracts during the first quarter, which gives us an idea about its performance in the quarter to be reported.

Moreover, the integration of Engility is expected to have been a key driver in this earnings season. The acquisition is also likely to have boosted the company’s margin profile and cash-flow generation.

Besides, revenue dis-synergies due to the elimination of prime sub-duplicate revenues, which affected the top line throughout the last fiscal year, are likely to have ended in the previous quarter. This is expected to have driven the first-quarter performance.
However, in its last earnings call, Science Applications hinted that a softer book-to-bill might be an overhang in the first quarter due to possible delays in awards owing to coronavirus-led disruptions.

What Our Model Says

The proven Zacks model does not conclusively predict an earnings beat for Science Applications this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Science Applications has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks to Consider

Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Campbell Soup Company CPB has an Earnings ESP of +1.23% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Guess, Inc. GES has an Earnings ESP of +12.75% and a Zacks Rank of 2.

Accenture PLC ACN has an Earnings ESP of +0.65% and a Zacks Rank of 3.

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