SRA stock falls on 2Q profit and lowered forecast

NEW YORK - Shares of SRA International Inc. sank Thursday after its fiscal second-quarter earnings fell short of Wall Street expectations and raised doubts among analysts about the company's recent acquisitions.

The company also cut its expectations for the full year.

Shares plunged $5.59, or 29 percent, to $13.50 in afternoon trading. Earlier, the stock hit $13.37, its lowest level since 2003.

The company said profit in its fiscal second quarter fell to $15.4 million, or 27 cents per share, down from $18.5 million, or 31 cents per share, for the year-ago period. That missed average estimates of 29 cents per share, according to polling by Thomson Reuters.

Revenue was up to $392.4 million, compared with $364.1 million a year ago. Analysts estimated $379.8 million, on average.

In a note to clients, Stephens Inc. analyst Tim Quillin noted that the recently acquired Era Corp. "is already missing sales targets and having a highly negative impact on" SRA's earnings.

He affirmed his view that the company's stock is undervalued only on the assumption that SRA's board "will fix Era, sell Era or sell the entire Company."

Fairfax, Va.-based SRA lowered its fiscal 2009 earnings per share estimate to between $1.12 to $1.22 from a previous estimate of $1.30 and $1.35.

The consensus estimate from analysts is $1.31 per share.

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