Booz Allen's revenue fell 4.2 percent as civil work stayed weak, and its adjusted profit rose anyway

The largest consulting firm working for the federal government booked less revenue than a year ago. Booz Allen Hamilton reported revenue of $2.8 billion for the quarter ended June 30, down 4.2 percent, and revenue excluding billable expenses of $1,965 million, down 3.8 percent. The civil side is the pressure point. The company said demand is accelerating across its national security portfolio, the defense and intelligence work, while its civil business, the agencies outside those two, remains challenged.

Two profit numbers moved in opposite directions. Net income was $198 million, down 26.9 percent from $271 million a year earlier, and diluted earnings were $1.63 a share against $2.16. On an adjusted basis, which the company uses to strip out items it calls non-operational, net income rose 17.9 percent to $217 million and earnings were $1.81 a share, up 22.3 percent. Adjusted EBITDA was $334 million, a margin of 11.9 percent, up 130 basis points. Free cash flow was $261 million, against $96 million in the same quarter last year.

The forward signals held up better than the revenue line. Backlog reached $39 billion, up 3.2 percent, and the firm booked $1.50 of new work for every dollar it recognized as revenue, a book-to-bill ratio of 1.5. Booz Allen deployed $447 million of capital in the quarter and declared a quarterly dividend of $0.59 a share, payable August 28 to holders of record on August 14. It kept its full-year outlook, expecting revenue of $11.2 billion to $11.7 billion and adjusted diluted earnings of $6.00 to $6.35 a share.

Chief executive Horacio Rozanski said the company is "on track with the expectations we set for the fiscal year amid challenging market dynamics."