Parsons Q2 Earnings Hit by $118M in Charges; Guidance Slashed
PSN sits 24% above its 52-week low of $46.88.
Summary
Parsons posted a Q2 net loss of $15 million after $118 million in portfolio-shaping and JV charges, and cut full-year guidance. Core operations showed resilience with 8% adjusted EBITDA growth excluding charges.
Key Events · Earnings and Guidance · PSN
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Q2 Net Loss on Portfolio Charges
A net loss of $15 million, or ($0.14) per share, was driven by $118 million in charges from portfolio-shaping actions and a joint venture program. Excluding these, adjusted EBITDA reached $161 million, up 8% year-over-year.
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Full-Year Guidance Cut
Revenue guidance was lowered to $6.2-$6.5 billion from $6.5-$6.8 billion; adjusted EBITDA to $500-$560 million from $615-$675 million; and operating cash flow to $430-$490 million from $470-$530 million.
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Portfolio-Shaping Actions
The company recorded a $77.5 million loss on two contracts held for sale and a $40.9 million charge on a joint venture project. A $19.3 million gain from divesting two SETA contracts partially offset these.
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Strong Bookings and Backlog
The book-to-bill ratio reached 1.2x for the quarter, with Federal Solutions bookings up 51% year-over-year. Total backlog increased to $9.3 billion.
Analysis · PSN · Technology
A net loss of $15 million followed $118 million in charges tied to portfolio-shaping actions and a joint venture program. Excluding those items, core adjusted EBITDA grew 8% to $161 million, yet full-year guidance was cut across revenue, adjusted EBITDA, and cash flow. The charges reflect a strategic pivot to exit underperforming contracts—a move that could improve margins over the long term but creates near-term earnings disruption. The stock may react negatively to the guidance reduction, though a strong 1.2x book-to-bill ratio and 10% organic growth in the Middle East provide some offset.
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At the time of this filing, PSN was trading at $58.34 on NYSE in the Technology sector, with a market capitalization of approximately $6.6B. The 52-week trading range was $46.88 to $89.50. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.