SRA lowers earnings guidance

SRA International has lowered its earnings expectations for its March quarter, citing a rise in bid and proposal expenses.

The integrator said it generated diluted earnings per share of $0.29 in the quarter, excluding stock option expense. The company’s original guidance range was $0.31 to $0.32. The company attributed the lower-than-anticipated earnings to a “heavier than expected influx” of government requests for proposals, which in turn prompted a higher investment in bid and proposal activities.

SRA also cited a decision to perform work for a long-term customer in advance of expected funding. The company said it now does not expect to recover its incurred costs.

SRA’s March quarter revenue is expected to be about $296 million, in line with the lower end of the original guidance range of $296 million to $301 million. The revenue number represents 31 percent year-over-year growth. SRA will announce March quarter earnings on May 1.

SRA also lowered revenue and earnings expectations for its fourth quarter and its full fiscal year, both of which end June 30.

The company said it expects fourth quarter revenue to range between $296 million and $306 million, with diluted earnings per share between $0.30 and $0.32, excluding stock option expense. The company originally anticipated revenue of $301 million to $308 million and diluted earnings per share of $0.34 to $0.35. The company said its new guidance reflects the continued high tempo of bid and proposal activities.

SRA anticipates full fiscal 2006 revenue from $1.178 billion to $1.188 billion, representing 34 percent to 35 percent growth year-over-year. The company estimated its fiscal 2006 diluted earnings per share to range between $1.18 and $1.20, excluding stock option expense. The company’s original estimate was for full year revenue of $1.183 billion to $1.195 billion and diluted earnings per share of $1.24 to $1.26.