Booz Allen's (BAH) Q1 Earnings Beat Estimates, Improve Y/Y

Booz Allen Hamilton Holding Corporation BAH reported mixed first-quarter fiscal 2020 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

Adjusted earnings per share of 93 cents beat the consensus mark by 6.9% and improved 12% on a year-over-year basis. The bottom line benefited from top-line growth, strong contract-level performance and operational management.

Revenues, Backlog & Headcount Increase Y/Y

Total revenues of $1.96 billion lagged the Zacks Consensus Estimate by a slight margin and increased 7.1% year over year. Revenues, excluding billable expenses, were $1.41 billion, increasing 10.5% on a year-over-year basis. Billable expenses accounted for 28.1% of revenues.

Total backlog increased 15.9% from the prior-year quarter’s reported figure to $23 billion. Funded backlog of $3.44 billion increased 7.6% year over year. Unfunded backlog was up 8.8% to $4.73 billion. Priced options went up 4.9% to $12.8 billion. Book-to-bill ratio was 2.17, up 68.2% year over year. Headcount of 27,381 increased 3.8% year over year.

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

Operating Results

Adjusted EBITDA amounted to $213 million, up 6.8% year over year. Adjusted EBITDA margin on revenues stayed flat year over year at 10.9%. Adjusted EBITDA margin on revenues, excluding billable expenses, decreased to 15.1% from 15.6% in the year-ago quarter.

Balance Sheet & Cash Flow

Booz Allen Hamilton exited fiscal first quarter with cash and cash equivalents of $620.6 million compared with $450.8 million at the end of the prior quarter. Long-term debt (net of current portion) was $2 billion, roughly flat with the previous quarter. The company generated $140.4 million of net cash from operating activities. Capital expenditure was $20.1 million and free cash flow was $120.4 million for the March-end quarter.

The company paid out dividends worth $43.8 million and repurchased shares worth $85.9 million in the reported quarter.

Fiscal 2021 Outlook

The company’s revenue-growth projection is 6-10%. The adjusted earnings per share guidance is $3.40-$3.60. The midpoint ($3.50) of the guided range is below the Zacks Consensus Estimate of $3.59.

Adjusted EBITDA margin on revenues is anticipated to be 10%. Operating cash flow is expected in the range of $550-$600 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.

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, which beat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis.

IQVIA Holdings IQV reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but fell 22.9% on a year-over-year basis.

Robert Half RHI reported second-quarter 2020 earnings of 41 cents per share beat the consensus mark by 17% but were down 58% year over year.

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