Science Applications International Corporation (SAIC) announced financial results for the second quarter ended July 31, 2015.
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Q2 revenues were $1,089 million compared to $939 million during the prior year quarter, which equates to revenue growth of 16% and, as is shown in Schedule 5, represents internal revenue contraction of 0.5% when revenue from the prior year quarter is adjusted to include historical revenue from the Scitor acquisition.
Total revenues increased due to the acquisition of Scitor which generated $147 million in revenue during the quarter.
Operating income for the quarter was $52 million, or 4.8% of revenues, down from $59 million in the prior year quarter. The decrease was primarily driven by costs associated with the acquisition and integration of Scitor ($12 million).
These costs were partially offset by operating income generated by Scitor during the quarter ($3 million after $11 million of amortization of acquired intangible assets), with the remainder primarily attributable to strong performance across our contract portfolio.
The Scitor acquisition and integration costs of $12 million have been added back to current quarter operating income in the summary table for the calculation of adjusted operating income in order to aid comparison with the prior year comparable period which did not include such costs. Adjusted operating income as a percentage of revenues was 5.9% for the quarter.
Net income for the quarter was $22 million compared to $34 million in the prior year quarter. The decrease was due to lower operating income and increased interest expense of $9 million on incremental term loan borrowings related to the acquisition of Scitor.
Diluted earnings per share was $0.46 for the quarter and adjusted diluted earnings per share (which excludes the estimated after-tax effects of the $12 million of acquisition and integration costs) was $0.66. The weighted-average diluted shares outstanding during the quarter was 47.6 million shares. ■