Why Booz Allen Hamilton Shares Plunged Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Booz Allen Hamilton Holding Corporation (NYSE: BAH  ) fell 10% Wednesday after the company released mixed fiscal fourth-quarter 2014 results and weak forward revenue guidance.

So what: Quarterly revenue fell 9.4% to $1.4 billion, which translated to a 17% drop in adjusted earnings per diluted share to $0.33. Analysts, on average, were expecting adjusted earnings of just $0.31 per share on sales of $1.4 billion.

For fiscal 2015, Booz Allen Hamilton expects revenue to decline in the mid-single digits from fiscal 2014 sales of $5.48 billion, which should result in adjusted earnings per diluted share of $1.50-$1.60. By contrast, analysts were looking for fiscal 2015 earnings of $1.56 per share on a revenue decline of less than 3% (to $5.33 billion).

Now what: Booz Allen Hamilton's quarterly results were solid, but I can't blame the market for taking a step back given its underwhelming revenue guidance. To its credit, Booz Allen Hamilton did increase its quarterly dividend by 10%, to $0.11 per share, to reward investors for their patience. Shares don't look particularly expensive at around 14 times next year's estimated sales, so if you don't mind collecting the dividend as Booz Allen Hamilton gradually continues to improve margins, the stock might just be worth a look.

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