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Leidos Holdings, Inc.’s (LDOS - Free Report) second-quarter 2022 adjusted earnings of $1.59 per share beat the Zacks Consensus Estimate of $1.55 by 2.6%. The bottom line also improved 4.6% from $1.52 per share registered a year ago.
The company reported GAAP earnings of $1.24 per share, which increased from the year-ago quarter’s earnings of $1.18.
The year-over-year upside can be attributed to the retirement of 0.3 million shares as part of the final settlement of the Accelerated Share Repurchase (ASR) agreement implemented in the first quarter of 2022, which resulted in a decline in share count.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings generated total revenues of $3,597 million in the quarter under consideration, exceeding the Zacks Consensus Estimate of $3,514 million by 2.4%.
The top line also improved 4.3% year over year. This increase in revenues can be attributed to growth in all three segments.
Backlog
At the end of second-quarter 2022, the company’s total backlog was $34.72 billion, down from $36.35 billion at first-quarter 2022 end. Of this, $7.09 billion was funded.
Operational Statistics
The total cost of revenues in the quarter increased 3.7% to $3,597 million.
Operating income totaled $271 million compared with the year-ago quarter’s operating income of $269 million.
The operating income margin for the quarter was 7.5% compared with 7.8% in the prior-year quarter.
Interest expenses were $50 million, up 8.7% year over year.
Segmental Performance
Defense Solutions: Net revenues in this segment improved 2% year over year to $2,052 million in the second quarter. This upside can be primarily attributed to the ramp-up of the Navy NGEN-R SMIT contract and the Enduring Indirect Fires Protection Capability (IFPC) contracts.
The segment’s operating income increased to $139 million from the year-ago quarter’s $137 million, with the operating margin being 6.8%.
Health: The segment recorded revenues of $688 million in the second quarter, which rose 7% year over year. The uptick was the result of increased volumes on the DHMSM program and the ramp-up of the Military and Family Life Counseling (MFLC) programs.
Operating income was $126 million compared with the year-ago quarter’s income of $107 million. The operating margin came in at 18.3%.
Civil: Revenues in this segment amounted to $857 million, up 7%. The revenue upside was driven by increased demand for existing programs with the Department of Energy (DoE) and commercial energy providers. Also, growth from the start of the NASA Advanced Enterprise Global Information Technology Solutions program contributed to this unit’s top-line performance.
While operating income declined from $55 million to $38 million, the operating margin was 4.4%.
Financials
LDOS’ cash and cash equivalents as of Jul 1, 2022 was $339 million compared with $727 million as of Dec 31, 2021.
Long-term debt, net of current portion, amounted to $4,023 million as of Jul 1, 2022 compared with $4,593 million as of Dec 31, 2021.
Net cash provided by operating activities during the first six months of 2022 was $133 million compared with $256 million a year ago.
2022 Guidance
Leidos Holdings reaffirmed its 2022 view. The company still expects to generate adjusted earnings in the range of $6.10-$6.50 per share. The Zacks Consensus Estimate for 2022 earnings, pegged at $6.46 per share, lies much above the mid-point of the guidance range.
Leidos Holdings also continues to expect its revenues in the range of $13.9-$14.3 billion. The Zacks Consensus Estimate for 2022 revenues, pegged at $14.18 billion, is above the mid-point of the guided range.
The company’s cash flow from operating activities is still anticipated to be at or above $1 billion.
Lockheed Martin Corporation (LMT - Free Report) reported second-quarter 2022 earnings of $6.32 per share, which surpassed the Zacks Consensus Estimate of $6.29 by 0.5%. The bottom line, however, declined 1.6% year over year.
The company’s net sales amounted to $15.45 billion, which missed the Zacks Consensus Estimate of $16.16 billion by 4.4%. The top line also declined 9.3% from $17.03 billion reported in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 30 cents by 10%.
The company’s net sales totaled $393 million, which beat the Zacks Consensus Estimate of $383 million by 2.6%. Moreover, the top line witnessed an improvement of 22.7% from the year-ago quarter’s $320.3 million.
AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2022 adjusted earnings of 72 cents per share, which surpassed the Zacks Consensus Estimate of 68 cents by 5.9%. Earnings recorded a solid surge of 53.2% from the year-ago quarter.
In the quarter under review, AAR generated net sales worth $476.1 million. The reported figure surpassed the Zacks Consensus Estimate of $468 million by 1.7% and also improved 8.8% from $437.6 million recorded in the year-ago quarter.
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Leidos Holdings (LDOS) Q2 Earnings Beat, Revenues Rise Y/Y
Leidos Holdings, Inc.’s (LDOS - Free Report) second-quarter 2022 adjusted earnings of $1.59 per share beat the Zacks Consensus Estimate of $1.55 by 2.6%. The bottom line also improved 4.6% from $1.52 per share registered a year ago.
The company reported GAAP earnings of $1.24 per share, which increased from the year-ago quarter’s earnings of $1.18.
The year-over-year upside can be attributed to the retirement of 0.3 million shares as part of the final settlement of the Accelerated Share Repurchase (ASR) agreement implemented in the first quarter of 2022, which resulted in a decline in share count.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. price-consensus-eps-surprise-chart | Leidos Holdings, Inc. Quote
Total Revenues
Leidos Holdings generated total revenues of $3,597 million in the quarter under consideration, exceeding the Zacks Consensus Estimate of $3,514 million by 2.4%.
The top line also improved 4.3% year over year. This increase in revenues can be attributed to growth in all three segments.
Backlog
At the end of second-quarter 2022, the company’s total backlog was $34.72 billion, down from $36.35 billion at first-quarter 2022 end. Of this, $7.09 billion was funded.
Operational Statistics
The total cost of revenues in the quarter increased 3.7% to $3,597 million.
Operating income totaled $271 million compared with the year-ago quarter’s operating income of $269 million.
The operating income margin for the quarter was 7.5% compared with 7.8% in the prior-year quarter.
Interest expenses were $50 million, up 8.7% year over year.
Segmental Performance
Defense Solutions: Net revenues in this segment improved 2% year over year to $2,052 million in the second quarter. This upside can be primarily attributed to the ramp-up of the Navy NGEN-R SMIT contract and the Enduring Indirect Fires Protection Capability (IFPC) contracts.
The segment’s operating income increased to $139 million from the year-ago quarter’s $137 million, with the operating margin being 6.8%.
Health: The segment recorded revenues of $688 million in the second quarter, which rose 7% year over year. The uptick was the result of increased volumes on the DHMSM program and the ramp-up of the Military and Family Life Counseling (MFLC) programs.
Operating income was $126 million compared with the year-ago quarter’s income of $107 million. The operating margin came in at 18.3%.
Civil: Revenues in this segment amounted to $857 million, up 7%. The revenue upside was driven by increased demand for existing programs with the Department of Energy (DoE) and commercial energy providers. Also, growth from the start of the NASA Advanced Enterprise Global Information Technology Solutions program contributed to this unit’s top-line performance.
While operating income declined from $55 million to $38 million, the operating margin was 4.4%.
Financials
LDOS’ cash and cash equivalents as of Jul 1, 2022 was $339 million compared with $727 million as of Dec 31, 2021.
Long-term debt, net of current portion, amounted to $4,023 million as of Jul 1, 2022 compared with $4,593 million as of Dec 31, 2021.
Net cash provided by operating activities during the first six months of 2022 was $133 million compared with $256 million a year ago.
2022 Guidance
Leidos Holdings reaffirmed its 2022 view. The company still expects to generate adjusted earnings in the range of $6.10-$6.50 per share. The Zacks Consensus Estimate for 2022 earnings, pegged at $6.46 per share, lies much above the mid-point of the guidance range.
Leidos Holdings also continues to expect its revenues in the range of $13.9-$14.3 billion. The Zacks Consensus Estimate for 2022 revenues, pegged at $14.18 billion, is above the mid-point of the guided range.
The company’s cash flow from operating activities is still anticipated to be at or above $1 billion.
Zacks Rank
Leidos Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Lockheed Martin Corporation (LMT - Free Report) reported second-quarter 2022 earnings of $6.32 per share, which surpassed the Zacks Consensus Estimate of $6.29 by 0.5%. The bottom line, however, declined 1.6% year over year.
The company’s net sales amounted to $15.45 billion, which missed the Zacks Consensus Estimate of $16.16 billion by 4.4%. The top line also declined 9.3% from $17.03 billion reported in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 30 cents by 10%.
The company’s net sales totaled $393 million, which beat the Zacks Consensus Estimate of $383 million by 2.6%. Moreover, the top line witnessed an improvement of 22.7% from the year-ago quarter’s $320.3 million.
AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2022 adjusted earnings of 72 cents per share, which surpassed the Zacks Consensus Estimate of 68 cents by 5.9%. Earnings recorded a solid surge of 53.2% from the year-ago quarter.
In the quarter under review, AAR generated net sales worth $476.1 million. The reported figure surpassed the Zacks Consensus Estimate of $468 million by 1.7% and also improved 8.8% from $437.6 million recorded in the year-ago quarter.