SRA International [SRX] on Tuesday reported higher third quarter earnings and sales driven primarily from acquisitions and the company reduced its revenue guidance for the year.
Net income increased 20 percent to $18 million, 30 cents earnings per share (EPS), from $15 million (26 cents EPS) a year ago, a penny below consensus estimates. Operating margins increased 70 basis points to 7.9 percent in part due to a reduction in low-margin rebillables.
Sales increased 18 percent to $376 million from $317.6 million a year ago. Organic growth accounted for just over 2 percent of the gain.
SRA lowered its expected sales guidance for its fiscal year that ends in June although it still expects revenues to be around $1.5 billion. Earnings goals were left intact due to higher margins associated with the higher labor services component of revenue. SRA’s backlog of signed business orders totaled $3.9 billion at the end of the third quarter, up 11 percent from a year ago.