10 Stocks With Explosive Earnings Growth: No. 9 Stanley, Inc. (SXE)

June 30, 2009 5:25 PM EDT

In the current difficult macroeconomic environment it is hard to find companies that are earning a meaningful profit, let alone growing earnings. But these 10 stocks have been rewarding investors with explosive earnings growth and stock performance to boot. You can track the entire series here.

Number 9: Stanley, Inc. (NYSE: SXE)

Stanley, Inc. is a provider of information technology services and solutions to U.S. defense, intelligence and federal civilian government agencies.

At March 31, 2009, Stanley had approximately 300 active contractual engagements across 54 federal government agencies. Customers include all major agencies of the Department of Defense, the Department of State, the Department of Homeland Security, the Department of Transportation, the Department of the Treasury, NASA, the Department of Justice and the Department of Health and Human Services. For the fiscal year ended March 31, 2009, or fiscal 2009, the company derived approximately 72% of its revenues from agencies within the Department of Defense and approximately 28% of revenues from federal civilian government agencies.

The company has approximately 4,800 employees, with approximately 62% holding Secret or Top Secret clearances with the U.S. government, which are necessary to work on classified contracts.

Stanley focuses on five service areas: systems engineering, enterprise integration, operational logistics, business process outsourcing and advanced engineering and technology.

From the fiscal year ended March 31, 1999 through fiscal 2009, Stanley increased revenues at a compound annual growth rate of 32%, and has been profitable in every year during that period. Revenues for fiscal 2009 were $779.7 million. At March 31, 2009, total backlog was $2,024.9 million and funded backlog was $340.4 million.

Earnings Growth:
Since the fiscal year ended March 31, 2005, Stanley Inc. has more than tripled its net income from $11.2 million to $37.2 million. Diluted EPS has more than doubled in that time from $0.70 to $1.56. For the fiscal year ended March 31 2009, Stanley Inc.'s EPS grew an amazing 39% YoY!

Earnings Prospects:
For the fiscal year 2010, Stanley Inc. sees EPS of $1.65-$1.79 which would represent growth of about 6%-15%. Analysts, on average, see EPS toward the high end of the company's range with the consensus currently at $1.75.

For the first quarter 2010, ending June 26, 2009, Stanley Inc. sees EPS of $0.41-$0.43. This compares to the $0.35 earned last year, or growth of 17%-23%. The Wall Street consensus is $0.41.

With a total backlog that has grown 13.5% YoY to $2.02 billion and the exploding size of the U.S. govenment, Stanley Inc's earnings prospects look strong for years to come.

Stock Performance:
Shares of SXE are down 9% YTD, versus a 2% rise in the S&P 500. Over the last year, SXE is down just 2% versus a 28% slide in the S&P 500. Over the last 5-years, SXE is up 111% versus the 33% slide in the S&P 500

Follow The Entire Series: 10 Stocks With Explosive Earnings Growth 2009

Past Series: 10 Stocks Taking Care of Investors 2009

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