Parsons Corporation (NYSE: PSN) reported Q3 EPS of $0.57, $0.24 better than the analyst estimate of $0.33. Revenue for the quarter came in at $1 billion versus the consensus estimate of $1.02 billion.

Third Quarter 2020 Results

Total revenue for the third quarter of 2020 decreased by $19 million, or 2%, from the prior year period to $1 billion. Operating income increased 24% to $66 million primarily as a result of an increase in equity in earnings and lower indirect, general and administrative (IG&A) expenses. Net income decreased to $41 million and net income margin decreased to 4.0% from the prior year period. These decreases were driven by the nonrecurring positive tax benefit impact included in the third quarter of 2019 from elections made in connection with the filing of the company's 2018 S-Corporation tax return and associated with the company's change in tax status. Diluted earnings per share (EPS) attributable to Parsons was $0.40 in the third quarter of 2020, compared to $0.57 in the prior year period.

Adjusted EBITDA including noncontrolling interests for the third quarter of 2020 was $101 million, a 13% increase over the prior year period. Adjusted EBITDA margin increased 130 basis points to 10.0%.

Adjusted EPS increased to $0.57, compared to $0.53 in the third quarter of 2019.

CEO Commentary

"We delivered strong third quarter results with record adjusted EBITDA and generated outstanding cash flow. We also recently announced a significant pending strategic acquisition in the rapidly expanding space market that exceeds all our disciplined quantitative and qualitative M&A criteria, while also preserving our financial flexibility for potential future acquisitions," said Chuck Harrington, chairman and chief executive officer of Parsons Corporation.

"Our strong operational performance enabled us to win large new contracts in high-priority national security markets. We continue to execute our strategic plan and look forward to further leveraging our strong balance sheet to drive additional shareholder value."

GUIDANCE:

Parsons Corporation sees FY2020 revenue of $3.95-4.05 billion, versus the consensus of $4.01 billion.

For earnings history and earnings-related data on Parsons Corporation (PSN) click here.