Booz Allen Tops Estimates, Despite Profit Drop

Government consultant Booz Allen Hamilton Holding Corp. said profit dropped in its most recent quarter, hurt by the end of a major contract, but results topped expectations.

Shares climbed 7.5% in early trading and have now risen 13% so far this month.

Chief Executive Horacio Rozanski said the company managed to eke out a 1.3% revenue increase "despite challenges presented by the end of the company's largest contract in July." A majority of the work from that contract was successfully transitioned to new vehicles and Booz Allen won "the vast majority" of the competitions for replacement task orders or contracts, Mr. Rozanski said, adding that the revenue gap from the contract transition was within the previously disclosed expected range of $100 million to $200 million.

For the quarter, McLean, Va.-based Booz Allen reported a profit of $56.2 million, or 37 cents a share, down from $65.3 million, or 42 cents, a year earlier. Revenue decreased 1.3% to $1.32 billion. Analysts projected 35 cents in earnings per share on $1.26 billion in sales, according to Thomson Reuters.

The company, first hired by the government in 1940 to help the Navy prepare for World War II, generates nearly all of its top line from the U.S. government. Like its peers, the firm has been crimped by lower government spending and budget uncertainty. But the firm said it won a significant number of large contracts during the quarter, pushing its backlog up to $12.55 billion at the end of September from $10.89 billion a year earlier. That comes in contrast to larger rival General Dynamics, which on Wednesday said backlog fell 7.7% in the third quarter.

For the year, Booz Allen backed its guidance. The firm sees revenue in a range of down 2% to up 2% from 2014 and earnings between $1.60 to $1.70 a share.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com

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(END) Dow Jones Newswires

October 28, 2015 10:45 ET (14:45 GMT)

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