The Pentagon has awarded another contract to Science Applications International Corporation (NYSE: SAIC), a provider of a comprehensive spectrum of information technologies to the engineering and defence sectors. SAIC is entering a new market for space services, which might result in a long-term rise in cash flow.
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The US intelligence community and space groups have awarded SAIC a $348 million contract for the third quarter of 2022. The customer’s identity and the tasks accomplished are not disclosed. SAIC is expected to contribute $100 million in digital engineering services to the top-secret space programme. IT services will also be supplied for another confidential customer for $46 million, with the possibility of future collaboration.
The Pentagon is spending extensively in space force development, and SAIC is one of the benefactors in the network-centric systems, command, and space reconnaissance area.
The commercial potential of SAIC’s developments cannot be assessed due to the confidentiality of the company’s contracts. However, the US Defense Department frequently awards big contracts to SAIC, the majority of which are for three years or more.
The company’s involvement in the contest, which will result in a contract for $556 million for the delivery of an IT solution for the US Navy’s personnel department, was announced last week. This is a tournament that SAIC has a chance to win.
The US Navy has previously awarded SAIC a five-year contract worth $93 million in early November 2021. Millions of dollars have been spent on data gathering and processing, monitoring the operation of military computer systems, maintaining the performance of particular electronic warfare systems, and testing next-generation military information solutions. As a result, SAIC has a strong position in the defence technology industry and provides in high-barrier-to-entry categories.
SAIC’s shares rose 2.01% to $88.60 on Monday. The stock volume stayed at 0.24 million shares, which was higher than the average daily volume of 0.24 million shares for the previous 50 days.