Science Applications International (SAIC 77.11, -9.14) has tumbled 10.6% after reporting in-line earnings on light revenue. In addition to a shortfall on the top line, the company's book to bill ratio slowed down from the full year rate. Today's decline puts shares in negative territory for the year, down 9.1%.
The government contractor reported in-line fourth quarter earnings of $0.79 per share on a 4.2% year-over-year decline in revenue to $1.03 billion, which was just shy of market expectations.
Book-to-bill ratio was 0.8x during the fourth quarter, which was a slowdown from the full year rate of 1.2x. It is worth pointing out that the full year rate was a record, attributed to the company's go-to-marketing strategy and an expanding pipeline of contract opportunities.
The company ended the year with a backlog of $8.00 billion, of which $1.80 billion was funded.
Fourth quarter revenue declined due to $12 million of lower subcontractor activity, an $8 million re-complete loss of an IT integration program for Homeland Security, a $12 million customer driven delay on a Marine Corp IT program, and $17 million of various decreases across contract portfolios and one fewer productive day in the quarter. New awards totaled $47 million.
Operating margin improved to 5.9% from 5.0% due to lower acquisition and integration expenses, lower intangible asset amortization, and cost savings initiatives.
Cash flows from operating activities totaled $62 million, down from $108 million one year ago.