CSRA (NYSE: CSRA) — one of 30 companies listed in Executive Mosaic’s GovCon Index — has reported earnings that exceeded Wall Street estimates and revenue below analyst expectations for the third quarter of its 2016 fiscal year and its first financial results statement as a publicly-traded company.
The federal technology services contractor, which runs its fiscal calendar on an April-March basis, posted earnings of 48 cents per share for the third quarter to top the consensus Wall Street outlook by 6 cents and revenue of $1.27 billion against analyst forecasts of $1.32 billion.
SRA International merged into the former Computer Sciences Corp. (NYSE: CSC) U.S. government services businesses to form CSRA, which started regular-way trading on the New York Stock Exchange Nov. 30.
Falls Church, Virginia-based CSRA calculated third quarter results on a pro forma basis that excludes costs related to the company’s creation and includes contributions from CSC Government Solutions and SRA, both subsidiaries of CSRA.
On a pro forma basis, CSRA said revenue declined 5.22 percent year-over-year but reiterated previous guidance that forecasts a compound annual growth rate of 2-to-3 percent in sales.
“The slope of decline is softened a little bit, but we absolutely have to replace that with new new work, ” CSRA CEO Larry Prior told investors Wednesday.
“We think that the pivot to growth is on our horizon, I just can’t call the quarter in FY 17 when it will happen.”
In opening remarks to investors, Prior singled out big data and cloud computing as priority technology investments for federal agencies that could present “double-digit annual growth” over the next three years.
More than 75 percent of CSRA’s work is in information technology and the company views its “pure-play” status as an advantage in the federal market for agencies seeking new digital technologies, Prior said.
“The capabilities we provide address the priority areas of IT investment for the federal government including cloud, cybersecurity, data analytics, agile-based software development methodologies and inevitable modernization of the government’s applications with a bias for software-as-a-service and mobile devices.”
CSRA’s fourth quarter guidance has the company’s earnings in a range of 45-to-49 cents per share versus the 41-cent Wall Street outlook and revenue of $1.28 billion-to-$1.33 billion against the analyst consensus of $1.37 billion.
The company will issue full-year guidance in future earnings reports and said it expects to achieve a compound annual growth rate of 8-to-10 percent for earnings per share.
Shares in CSRA have declined 25.53 percent since the year’s start and are down 23.65 percent since the company started regular-way trading Nov. 30.
