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Shares of Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) increased 5.8% to reach $19.84 on May 8, reflecting investors’ optimism following the company’s latest result release.
KTOS reported first-quarter 2024 adjusted earnings of 11 cents per share, up 83.3% from 6 cents reported in the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of earnings of 5 cents per share by 120%.
Kratos Defense reported GAAP earnings of a penny per share against a loss of 5 cents in the first quarter of 2023.
Kratos Defense & Security Solutions, Inc. Price, Consensus and EPS Surprise
Total revenues were $277.2 million, which surpassed the Zacks Consensus Estimate of $251 million by 10.5%. The figure also increased 19.6% from $231.8 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the Kratos Government Solutions and Unmanned Systems segments’ revenue growth.
Operational Update
Kratos Defense’s selling, general and administrative expenses increased 12.5% year over year while research and development expenses were down 5.9%. Depreciation expenses increased 35.7% while expenses related to the amortization of intangible assets surged 31.3%.
The company reported operating income of $7 million, which increased massively from the year-ago quarter’s $0.5 million.
It posted a consolidated book-to-bill ratio of 1.1-1.0, with bookings worth $381.1 million.
The total backlog at the end of the first quarter was $1.27 billion compared with $1.24 billion at the end of the fourth quarter 2023.
Segmental Performance
Unmanned Systems: Net revenues improved 23.8% year over year to $59.4 million.
Kratos Government Solutions: Net revenues increased 47.9% to $217.8 million on a year-over-year basis.
Financial Details
As of Mar 31, 2024, cash and cash equivalents totaled $338.9 million, up from $72.8 million as of Dec 31, 2023. The long-term debt amounted to $179.4 million as of Mar 31, 2024, down from $219.3 million recorded as of Dec 31, 2023.
During the first quarter, cash flow from operating activities totaled $0.7 million against cash outflow of $25.7 million in the previous year.
Guidance
Kratos Defense has provided its outlook for the second quarter and reiterated its 2024 guidance. For the second quarter, it expects revenues in the $265-$280 million range. The Zacks Consensus Estimate for revenues is pegged at $269.8 million, lower than the midpoint of the company’s guided range.
For 2024, Kratos Defense still expects revenues in the range of $1.13-$1.15 billion. The consensus estimate for revenues is pegged at $1.13 billion, which lies almost in line with the lower end of the company’s projected range.
General Dynamics Corporation (GD - Free Report) reported first-quarter earnings per share (EPS) of $2.88, which missed the Zacks Consensus Estimate of $2.89 by 0.4%. However, the figure increased 9.1% from earnings of $2.64 per share recorded in the year-ago quarter.
GD’s revenues of $10,731 million beat the consensus estimate of $10,201 million by 5.2%. The top line also improved 8.6% from the prior-year reported figure.
RTX Corporation’s (RTX - Free Report) first-quarter 2024 adjusted EPS of $1.34 beat the Zacks Consensus Estimate of $1.23 by 8.9%. The bottom line also improved 9.8% from the year-ago quarter’s level of $1.22.
RTX’s net sales were $19,305 million, which surpassed the consensus estimate of $18,412.6 million by 4.8%. The top line also improved 12% from $17,214 million recorded in the first quarter of 2023.
TransDigm Group Incorporated (TDG - Free Report) reported second-quarter adjusted earnings of $7.99 per share, which beat the Zacks Consensus Estimate of $7.37 by 8.4%. The bottom line also improved 33.6% from the prior-year quarter’s reported figure of $5.98.
Net sales amounted to $1.92 billion, up 20.5% from $1.59 billion registered in the prior-year period. The reported figure also beat the consensus estimate of $1.89 billion by 1.8%.
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Kratos Defense (KTOS) Q1 Earnings Top, Revenues Rise Y/Y
Shares of Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) increased 5.8% to reach $19.84 on May 8, reflecting investors’ optimism following the company’s latest result release.
KTOS reported first-quarter 2024 adjusted earnings of 11 cents per share, up 83.3% from 6 cents reported in the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of earnings of 5 cents per share by 120%.
Kratos Defense reported GAAP earnings of a penny per share against a loss of 5 cents in the first quarter of 2023.
Kratos Defense & Security Solutions, Inc. Price, Consensus and EPS Surprise
Kratos Defense & Security Solutions, Inc. price-consensus-eps-surprise-chart | Kratos Defense & Security Solutions, Inc. Quote
Total Revenues
Total revenues were $277.2 million, which surpassed the Zacks Consensus Estimate of $251 million by 10.5%. The figure also increased 19.6% from $231.8 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the Kratos Government Solutions and Unmanned Systems segments’ revenue growth.
Operational Update
Kratos Defense’s selling, general and administrative expenses increased 12.5% year over year while research and development expenses were down 5.9%. Depreciation expenses increased 35.7% while expenses related to the amortization of intangible assets surged 31.3%.
The company reported operating income of $7 million, which increased massively from the year-ago quarter’s $0.5 million.
It posted a consolidated book-to-bill ratio of 1.1-1.0, with bookings worth $381.1 million.
The total backlog at the end of the first quarter was $1.27 billion compared with $1.24 billion at the end of the fourth quarter 2023.
Segmental Performance
Unmanned Systems: Net revenues improved 23.8% year over year to $59.4 million.
Kratos Government Solutions: Net revenues increased 47.9% to $217.8 million on a year-over-year basis.
Financial Details
As of Mar 31, 2024, cash and cash equivalents totaled $338.9 million, up from $72.8 million as of Dec 31, 2023. The long-term debt amounted to $179.4 million as of Mar 31, 2024, down from $219.3 million recorded as of Dec 31, 2023.
During the first quarter, cash flow from operating activities totaled $0.7 million against cash outflow of $25.7 million in the previous year.
Guidance
Kratos Defense has provided its outlook for the second quarter and reiterated its 2024 guidance. For the second quarter, it expects revenues in the $265-$280 million range. The Zacks Consensus Estimate for revenues is pegged at $269.8 million, lower than the midpoint of the company’s guided range.
For 2024, Kratos Defense still expects revenues in the range of $1.13-$1.15 billion. The consensus estimate for revenues is pegged at $1.13 billion, which lies almost in line with the lower end of the company’s projected range.
Zacks Rank
Kratos Defense currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
General Dynamics Corporation (GD - Free Report) reported first-quarter earnings per share (EPS) of $2.88, which missed the Zacks Consensus Estimate of $2.89 by 0.4%. However, the figure increased 9.1% from earnings of $2.64 per share recorded in the year-ago quarter.
GD’s revenues of $10,731 million beat the consensus estimate of $10,201 million by 5.2%. The top line also improved 8.6% from the prior-year reported figure.
RTX Corporation’s (RTX - Free Report) first-quarter 2024 adjusted EPS of $1.34 beat the Zacks Consensus Estimate of $1.23 by 8.9%. The bottom line also improved 9.8% from the year-ago quarter’s level of $1.22.
RTX’s net sales were $19,305 million, which surpassed the consensus estimate of $18,412.6 million by 4.8%. The top line also improved 12% from $17,214 million recorded in the first quarter of 2023.
TransDigm Group Incorporated (TDG - Free Report) reported second-quarter adjusted earnings of $7.99 per share, which beat the Zacks Consensus Estimate of $7.37 by 8.4%. The bottom line also improved 33.6% from the prior-year quarter’s reported figure of $5.98.
Net sales amounted to $1.92 billion, up 20.5% from $1.59 billion registered in the prior-year period. The reported figure also beat the consensus estimate of $1.89 billion by 1.8%.