Leidos Holdings, Inc. (LDOS - Free Report) reported fourth-quarter 2017 adjusted earnings of 87 cents per share, beating the Zacks Consensus Estimate of 83 cents by 4.8%. Earnings improved 16% from the year-ago quarter's figure of 75 cents.
Excluding one-time items, the company reported GAAP earnings of 74 cents per share, compared with the prior-year quarter’s earnings of 39 cents.
For 2017, the company reported adjusted earnings of $3.72 per share, beating the Zacks Consensus Estimate of $3.70 by 0.5%. The reported number also improved 6% from the year-ago $3.51.
Total Revenues
Leidos Holdings posted total revenues of $2,516 million in the quarter, which missed the Zacks Consensus Estimate of $2,586.5 million by 2.7%. The figure also deteriorated 2.3% year over year.
For 2017, the company posted total revenues of $10.17 billion which lagged the Zacks Consensus Estimate of $10.24 billion by 0.7%. However, revenues improved 44.4% year over year.
Backlog
At the end of 2017, the company’s backlog of signed business orders was $17.5 billion, of which $5 billion was funded. Total backlog at the end of 2016 was $17.7 billion, of which $5.9 billion was funded.
Operational Statistics
Total cost of revenues in the reported quarter declined1.5% to $2,231 million. Operating income was $101 million, compared with $152 million in the year-ago quarter.
Interest expenses totaled $38 million, down from $39 million in fourth-quarter 2016.
Segment Performance
Defense Solutions: Net sales at the segment dropped 3.8% to $1,221 million from the prior-year figure of $1,269 million. Moreover, operating income declined to $85 million from the year-ago tally of $88 million. Meanwhile, operating margin expanded 10 basis points (bps) to 7%.
Health: The segment recorded net sales of $441 million in the reported quarter, down 0.5%. While operating income declined 8.3% to $44 million, operating margin contracted 80 bps to 10%.
Civil: Net sales at the segment were $854 million, down 0.9%. Operating income fell 15.2% to $56 million and operating margin contracted 110 bps to 6.6%.
Financials
Cash and cash equivalents as of Dec 31, 2017, were $390 million, compared with $376 million as of Dec 30, 2016. Net cash inflow from operating activity in 2017 was $526 million, compared with $449 million a year ago.
Guidance
Leidos Holdings issued its 2018 guidance. The company expects adjusted earnings per share in the range of $4.15 to $4.50 on revenues of $10.25-$10.65 billion.
Adjusted earnings before interest, tax, depreciation and amortization margin is anticipated in the range of 10.1-10.4%. Leidos Holdings expects to generate cash flow from operating activities of $675 million or more in 2018.
Peer Releases
Spirit AeroSystems Holdings (SPR - Free Report) recorded fourth-quarter 2017 adjusted earnings of $1.32 per share, which beat the Zacks Consensus Estimate of $1.22 by 8.2%.
Boeing Company (BA - Free Report) reported adjusted earnings per share of $4.80 for fourth-quarter 2017, beating the Zacks Consensus Estimate of $2.91 by 64.9%.
Lockheed Martin (LMT - Free Report) reported fourth-quarter 2017 adjusted earnings from continuing operations of $4.30 per share, which surpassed the Zacks Consensus Estimate of $4.06 by 5.9%.
Zacks Rank
Leidos Holdings has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Leidos Holdings, Inc. (LDOS - Free Report) reported fourth-quarter 2017 adjusted earnings of 87 cents per share, beating the Zacks Consensus Estimate of 83 cents by 4.8%. Earnings improved 16% from the year-ago quarter's figure of 75 cents.
Excluding one-time items, the company reported GAAP earnings of 74 cents per share, compared with the prior-year quarter’s earnings of 39 cents.
For 2017, the company reported adjusted earnings of $3.72 per share, beating the Zacks Consensus Estimate of $3.70 by 0.5%. The reported number also improved 6% from the year-ago $3.51.
Total Revenues
Leidos Holdings posted total revenues of $2,516 million in the quarter, which missed the Zacks Consensus Estimate of $2,586.5 million by 2.7%. The figure also deteriorated 2.3% year over year.
For 2017, the company posted total revenues of $10.17 billion which lagged the Zacks Consensus Estimate of $10.24 billion by 0.7%. However, revenues improved 44.4% year over year.
Backlog
At the end of 2017, the company’s backlog of signed business orders was $17.5 billion, of which $5 billion was funded. Total backlog at the end of 2016 was $17.7 billion, of which $5.9 billion was funded.
Operational Statistics
Total cost of revenues in the reported quarter declined1.5% to $2,231 million. Operating income was $101 million, compared with $152 million in the year-ago quarter.
Interest expenses totaled $38 million, down from $39 million in fourth-quarter 2016.
Segment Performance
Defense Solutions: Net sales at the segment dropped 3.8% to $1,221 million from the prior-year figure of $1,269 million. Moreover, operating income declined to $85 million from the year-ago tally of $88 million. Meanwhile, operating margin expanded 10 basis points (bps) to 7%.
Health: The segment recorded net sales of $441 million in the reported quarter, down 0.5%. While operating income declined 8.3% to $44 million, operating margin contracted 80 bps to 10%.
Civil: Net sales at the segment were $854 million, down 0.9%. Operating income fell 15.2% to $56 million and operating margin contracted 110 bps to 6.6%.
Financials
Cash and cash equivalents as of Dec 31, 2017, were $390 million, compared with $376 million as of Dec 30, 2016. Net cash inflow from operating activity in 2017 was $526 million, compared with $449 million a year ago.
Guidance
Leidos Holdings issued its 2018 guidance. The company expects adjusted earnings per share in the range of $4.15 to $4.50 on revenues of $10.25-$10.65 billion.
Adjusted earnings before interest, tax, depreciation and amortization margin is anticipated in the range of 10.1-10.4%. Leidos Holdings expects to generate cash flow from operating activities of $675 million or more in 2018.
Peer Releases
Spirit AeroSystems Holdings (SPR - Free Report) recorded fourth-quarter 2017 adjusted earnings of $1.32 per share, which beat the Zacks Consensus Estimate of $1.22 by 8.2%.
Boeing Company (BA - Free Report) reported adjusted earnings per share of $4.80 for fourth-quarter 2017, beating the Zacks Consensus Estimate of $2.91 by 64.9%.
Lockheed Martin (LMT - Free Report) reported fourth-quarter 2017 adjusted earnings from continuing operations of $4.30 per share, which surpassed the Zacks Consensus Estimate of $4.06 by 5.9%.
Zacks Rank
Leidos Holdings has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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