Booz Allen Hamilton (BAH 8.86%) stock tumbled 8.6% through 11:10 a.m. ET Friday after missing on its fiscal Q2 2026 earnings report this morning, then lowering guidance for the year.
Expected to earn $1.51 per share (adjusted for one-time items) on sales of just under $3 billion, Booz ended up reporting an adjusted profit of $1.49 per share, an sales of $2.9 billion.
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Booz Allen Q2 earnings
It gets worse. Booz's earnings as calculated according to generally accepted accounting principles (GAAP) came in significantly below the "adjusted" figure -- just $1.42 per share. This represents a 53% drop year over year. (The drop in adjusted earnings was under 18%.)
Revenue declined only 8%.
Booz blamed the weak results on a "continued funding slowdown." That's not referring to the government shutdown, mind you, which didn't kick in until the quarter was over. Indeed, Booz noted that its important national security portfolio actually grew "solidly" in the quarter. Rather, it was the company's civil business that was "experiencing delayed recovery" in Q2.
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Key Data Points
Booz's bleak forecast
Continuing the bad news, Booz lowered guidance through the end of its fiscal 2026. Despite boasting of a "record Q2 backlog of $40 billion and quarterly book-to-bill ratio of 1.7x," Booz warned full-year revenue will not exceed $11.5 billion (a 4% reduction in guidance, and at least a 4% decline year over year).
Adjusted earnings (which as we've already seen are weaker than GAAP earnings), will be no more than $5.65 per share (at least 9% worse than expected), and free cash flow will be about $900 million. The good news is that this still leaves Booz stock looking rather cheap at only 12.6 times FCF today.
The bad news is that, with sales shrinking, investors may not care.
