11:17 AM EDT, 06/02/2025 (MT Newswires) -- Science Applications International's ( SAIC ) fiscal first-quarter earnings trailed analysts' estimates, while the US government services contractor expects business volatility to continue in the near term amid the Trump administration's focus on gaining efficiency.

Adjusted earnings were flat year on year at $1.92 a share for the quarter ended May 2, below the FactSet-polled consensus of $2.12. Revenue rose 2% to $1.88 billion, just above the $1.87 billion projected by analysts.

The stock fell about 13% intraday Monday.

The Department of Government Efficiency, created by President Donald Trump, has been spearheading federal spending cuts and a plan to pare down the government workforce. These spending cuts could impact the likelihood of companies securing government contracts.

"We continue to see higher rates of turnover among our customers contributing to procurement delays and award timelines moving to the right," Chief Executive Toni Townes-Whitley said in prepared remarks published on the company's website.

"The year-to-date net impact to our financial results from the government's efficiency initiatives remain nominal with an estimated annualized revenue impact of less than 1%," Townes-Whitley said. "We expect conditions to remain very fluid over the next few months as budget negotiations play out and agencies continue to implement the strategic priorities of this administration."

The company continues to expect adjusted EPS of $9.10 to $9.30 on revenue of $7.60 billion to $7.75 billion for the ongoing fiscal year. Analysts are looking for non-GAAP EPS of $9.26 on sales of $7.68 billion, compared with previous year's $9.13 and $7.48 billion, respectively.

Organic revenue growth should pick up in the second half of the year due to "new business ramping up and a more modest headwind from contract transitions in the fourth quarter," Chief Financial Officer Prabu Natarajan said in prepared remarks.

"Should the ramp on new business move to the right as a result of the macro environment, more of our growth in (fiscal 2026) will need to come from on contract growth," according to Natarajan.

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