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Leidos Holdings (LDOS) Beats on Q2 Earnings, Revenues Lag
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Leidos Holdings, Inc. (LDOS - Free Report) posted second-quarter 2018 adjusted earnings of $1.12 per share, beating the Zacks Consensus Estimate of $1.05 by 6.7%. The reported number also increased 7.7% from the year-ago figure of $1.04.
The company reported GAAP earnings per share of 94 cents in the reported quarter, which increased 46.9% from the year-ago figure of 64 cents.
Total Revenues
Leidos Holdings posted total revenues of $2,529 million in the quarter, which lagged the Zacks Consensus Estimate of $2,563 million by 1.3%. The reported figure also declined 1.6% year over year.
Backlog
At the end of second-quarter 2018, the company’s backlog of signed business orders was $18.3 billion, of which $5.4 billion was funded. Total backlog at the end of the first quarter was $17.6 billion, of which $4.6 billion was funded.
Operational Statistics
Total cost of revenues in the reported quarter declined 1.7% to $2,152 million. Operating income was $199 million compared with $166 million in the year-ago quarter.
Operating margin increased to 7.9% from 6.5% in the prior year quarter, primarily due to favorable contract mix along with decreases in amortization of intangible assets as well as integration and restructuring costs.
Interest expenses were $35 million, up from $34 million in the year-ago quarter.
Segment Performance
Defense Solutions: Net sales at the segment improved 1% to $1,256 million from the prior-year figure of $1,243 million. The increase was primarily attributable to new awards, timing of revenue recognition on certain contracts and improved program performance.
Also, operating income improved to $93 million from the year-ago income of $63 million, with operating margin expanding 230 basis points (bps) to 7.4%.
Health: The segment recorded net sales of $451 million in the reported quarter, down 0.7%. The decrease was primarily attributable to the completion of certain contracts.
Operating income also decreased 8.1% to $68 million along with operating margin contracting 120 bps to 15.1%.
Civil: Net sales at the segment were $822 million, down 6.1%. The decrease was primarily due to the completion of certain contracts and a net decrease in program volumes.
Operating income also decreased 7.6% to $61 million along with operating margin contracting 10 bps to 7.4%.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Cash and cash equivalents as of Jun 29, 2018 were $303 million compared with $390 million as of Dec 29, 2017. Net cash provided by operating activities in the second quarter was $271 million, compared with $166 million a year ago.
2018 Guidance
For 2018, Leidos Holdings reaffirmed its guidance. The company continues to expect earnings in the range of $4.15 to $4.50 per share. Revenues are still expected between $10.25 billion and $10.65 billion.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin have been reaffirmed at the range of 10.1-10.4%. The company has also reiterated its projection of cash flow provided by operating activities from continuing operations at $675 million or more.
Lockheed Martin (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6% from 57 cents in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the prior-year figure of 67 cents.
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Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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Leidos Holdings (LDOS) Beats on Q2 Earnings, Revenues Lag
Leidos Holdings, Inc. (LDOS - Free Report) posted second-quarter 2018 adjusted earnings of $1.12 per share, beating the Zacks Consensus Estimate of $1.05 by 6.7%. The reported number also increased 7.7% from the year-ago figure of $1.04.
The company reported GAAP earnings per share of 94 cents in the reported quarter, which increased 46.9% from the year-ago figure of 64 cents.
Total Revenues
Leidos Holdings posted total revenues of $2,529 million in the quarter, which lagged the Zacks Consensus Estimate of $2,563 million by 1.3%. The reported figure also declined 1.6% year over year.
Backlog
At the end of second-quarter 2018, the company’s backlog of signed business orders was $18.3 billion, of which $5.4 billion was funded. Total backlog at the end of the first quarter was $17.6 billion, of which $4.6 billion was funded.
Operational Statistics
Total cost of revenues in the reported quarter declined 1.7% to $2,152 million. Operating income was $199 million compared with $166 million in the year-ago quarter.
Operating margin increased to 7.9% from 6.5% in the prior year quarter, primarily due to favorable contract mix along with decreases in amortization of intangible assets as well as integration and restructuring costs.
Interest expenses were $35 million, up from $34 million in the year-ago quarter.
Segment Performance
Defense Solutions: Net sales at the segment improved 1% to $1,256 million from the prior-year figure of $1,243 million. The increase was primarily attributable to new awards, timing of revenue recognition on certain contracts and improved program performance.
Also, operating income improved to $93 million from the year-ago income of $63 million, with operating margin expanding 230 basis points (bps) to 7.4%.
Health: The segment recorded net sales of $451 million in the reported quarter, down 0.7%. The decrease was primarily attributable to the completion of certain contracts.
Operating income also decreased 8.1% to $68 million along with operating margin contracting 120 bps to 15.1%.
Civil: Net sales at the segment were $822 million, down 6.1%. The decrease was primarily due to the completion of certain contracts and a net decrease in program volumes.
Operating income also decreased 7.6% to $61 million along with operating margin contracting 10 bps to 7.4%.
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 29, 2018 were $303 million compared with $390 million as of Dec 29, 2017. Net cash provided by operating activities in the second quarter was $271 million, compared with $166 million a year ago.
2018 Guidance
For 2018, Leidos Holdings reaffirmed its guidance. The company continues to expect earnings in the range of $4.15 to $4.50 per share. Revenues are still expected between $10.25 billion and $10.65 billion.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin have been reaffirmed at the range of 10.1-10.4%. The company has also reiterated its projection of cash flow provided by operating activities from continuing operations at $675 million or more.
Zacks Rank
Leidos Holdings currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Lockheed Martin (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%. The bottom line also increased 52.6% from 57 cents in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the
prior-year figure of 67 cents.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>