Science Applications (SAIC) Q3 Earnings: What's in Store?

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Science Applications International Corporation SAIC is set to report third-quarter fiscal 2019 earnings on Dec 6.

Science Applications' earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average positive surprise being 20.9%. In the last reported quarter, the company delivered a positive earnings surprise of 15.3%.

For the fiscal third quarter, the Zacks Consensus Estimate for earnings is pegged at $1.14, reflecting 17.5% improvement year over year. For revenues, the consensus estimate stands at $1.16 billion, indicating 1.4% increase year over year.

Let's see how things are shaping up prior to this announcement.

Science Applications International Corporation Price and EPS Surprise

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

Factors to Consider

Science Applications is perennially benefiting from back-to-back contract wins. The government's inclination to adopt technologies that will reduce costs and improve efficiency of the system is a positive for the company.

We note that the company won major contracts and task orders throughout the fiscal third quarter. This is expected to reflect positively in the top line.

Moreover, higher number of orders in its supply chain is a tailwind. Further, the company's cost restructuring and minimizing activities are likely to continue and take some pressure off the margins in the fiscal third quarter as well.

However, Science Applications has to continuously invest in value drivers, which act as a hedge against competition from big players like CACI International CACI , Unisys UIS , Accenture and like. These ongoing investments in differentiating solutions and platform integrations, which are expected to reap long-term benefits, are expected to remain a drag on margins.

What the Zacks Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Science Applications currently carries a Zacks Rank #3 with an Earnings ESP of +0.44%.

Stock With a Favorable Combination

Here is a stock, which per our model, has the right combination of elements to post an earnings beat this quarter:

lululemon athletica inc. LULU has an Earnings ESP of +1.55% and carries a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks here .

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Science Applications International Corporation (SAIC): Free Stock Analysis Report

Unisys Corporation (UIS): Free Stock Analysis Report

CACI International, Inc. (CACI): Free Stock Analysis Report

lululemon athletica inc. (LULU): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: SAIC , UIS , CACI , LULU

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