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Leidos Holdings (LDOS) Beats on Q2 Earnings, Raises '17 View
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Leidos Holdings, Inc. (LDOS - Free Report) posted second-quarter 2017 adjusted earnings of $1.04 per share, beating the Zacks Consensus Estimate of 77 cents by 35.1%. The reported number also increased 52.9% from the year-ago figure of 68 cents.
Total Revenue
Leidos Holdings posted total revenue of $2,571 million in the quarter, which surpassed the Zacks Consensus Estimate of $2,557 million by 0.5%. The reported figure also improved 99.6% year over year.
Backlog
At the end of the second quarter, the company’s backlog of signed business orders was $17.1 billion, of which $5 billion was funded. Total backlog at the end of first quarter was $16.9 billion, of which $4.9 billion was funded.
Operational Statistics
Total cost of revenues in the reported quarter surged 95.7% to $2,233 million. Operating income was $166 million compared with $75 million in the year-ago quarter.
Interest expenses were $36 million, up from $15 million in the year-ago quarter.
Segment Performance
Defense Solutions: Net sales at the segment improved 58.3% to $1,243 million from the prior-year figure of $785 million. Also, operating income improved to $63 million from the year-ago tally of $60 million, with operating margin contracting 250 basis points (bps) to 5.1%.
Health: The segment recorded net sales of $454 million in the reported quarter, up 123.6%. While operating income increased 311.1% to $74 million, operating margin expanded 800 bps to 16.3%.
Civil: Net sales at the segment were $875 million, up 191.7%. While operating income increased 230% to $66 million, operating margin expanded 80 bps to 7.5%.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Cash and cash equivalents as of Jun 30 were $262 million compared with $376 million as of Dec 30, 2016. Net cash outflow from operating activity in the second quarter was $177 million, compared with $72 million a year ago.
Guidance
For 2017, the company raised its earnings expectation in the range of $3.45 to $3.60 per share from $3.05 to $3.35, guided earlier.
Revenues are now expected to be in between $10.1 billion and $10.4 billion compared with prior guidance of $10.0 billion - $10.4 billion.
Adjusted earnings before interest, tax, depreciation and amortization margin is anticipated in the range of 9.8−10.2%, up from the prior range of 9.5−10.0%. However, the company reiterated its projection of cash flows provided by operating activities from continuing operations to be $475 million or more.
Peer Releases
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2017 earnings from continuing operations of $3.23 per share, beating the Zacks Consensus Estimate of $3.10 by 4.2%. The bottom line also surpassed the year-ago period’s figure by 10.2%.
Textron Inc. (TXT - Free Report) reported second-quarter 2017 adjusted earnings from continuing operations of 60 cents per share, beating the Zacks Consensus Estimate of 55 cents by 9.1%.
The Boeing Company (BA - Free Report) reported adjusted earnings of $2.55 per share for second-quarter 2017, beating the Zacks Consensus Estimate of $2.32 by 9.9%. In the year-ago quarter, the company had incurred a loss of 44 cents.
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Leidos Holdings (LDOS) Beats on Q2 Earnings, Raises '17 View
Leidos Holdings, Inc. (LDOS - Free Report) posted second-quarter 2017 adjusted earnings of $1.04 per share, beating the Zacks Consensus Estimate of 77 cents by 35.1%. The reported number also increased 52.9% from the year-ago figure of 68 cents.
Total Revenue
Leidos Holdings posted total revenue of $2,571 million in the quarter, which surpassed the Zacks Consensus Estimate of $2,557 million by 0.5%. The reported figure also improved 99.6% year over year.
Backlog
At the end of the second quarter, the company’s backlog of signed business orders was $17.1 billion, of which $5 billion was funded. Total backlog at the end of first quarter was $16.9 billion, of which $4.9 billion was funded.
Operational Statistics
Total cost of revenues in the reported quarter surged 95.7% to $2,233 million. Operating income was $166 million compared with $75 million in the year-ago quarter.
Interest expenses were $36 million, up from $15 million in the year-ago quarter.
Segment Performance
Defense Solutions: Net sales at the segment improved 58.3% to $1,243 million from the prior-year figure of $785 million. Also, operating income improved to $63 million from the year-ago tally of $60 million, with operating margin contracting 250 basis points (bps) to 5.1%.
Health: The segment recorded net sales of $454 million in the reported quarter, up 123.6%. While operating income increased 311.1% to $74 million, operating margin expanded 800 bps to 16.3%.
Civil: Net sales at the segment were $875 million, up 191.7%. While operating income increased 230% to $66 million, operating margin expanded 80 bps to 7.5%.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. Price, Consensus and EPS Surprise | Leidos Holdings, Inc. Quote
Financials
Cash and cash equivalents as of Jun 30 were $262 million compared with $376 million as of Dec 30, 2016. Net cash outflow from operating activity in the second quarter was $177 million, compared with $72 million a year ago.
Guidance
For 2017, the company raised its earnings expectation in the range of $3.45 to $3.60 per share from $3.05 to $3.35, guided earlier.
Revenues are now expected to be in between $10.1 billion and $10.4 billion compared with prior guidance of $10.0 billion - $10.4 billion.
Adjusted earnings before interest, tax, depreciation and amortization margin is anticipated in the range of 9.8−10.2%, up from the prior range of 9.5−10.0%. However, the company reiterated its projection of cash flows provided by operating activities from continuing operations to be $475 million or more.
Peer Releases
Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2017 earnings from continuing operations of $3.23 per share, beating the Zacks Consensus Estimate of $3.10 by 4.2%. The bottom line also surpassed the year-ago period’s figure by 10.2%.
Textron Inc. (TXT - Free Report) reported second-quarter 2017 adjusted earnings from continuing operations of 60 cents per share, beating the Zacks Consensus Estimate of 55 cents by 9.1%.
The Boeing Company (BA - Free Report) reported adjusted earnings of $2.55 per share for second-quarter 2017, beating the Zacks Consensus Estimate of $2.32 by 9.9%. In the year-ago quarter, the company had incurred a loss of 44 cents.
Zacks Rank
Leidos Holdings currently carries a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>