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What's in Store for Leidos Holdings' (LDOS) Q3 Earnings?
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Leidos Holdings, Inc. (LDOS - Free Report) is scheduled to release third-quarter 2020 results on Nov 2, before market open. In the last reported quarter, the company delivered an earnings surprise of 44.86%.
Moreover, Leidos Holdings delivered an earnings surprise of 16.50%, on average, in the trailing four quarters.
Let’s discuss how things have shaped ahead of the announcement.
Factors at Play
In May 2020, Leidos Holdings acquired L3Harris Technologies' Security Detection and Automation businesses for $1 billion. Positive synergies from this buyout are expected to have boosted the company’s third-quarter revenues.
Furthermore, over the past couple of quarters, revenues for the company's Defense Solutions segment have improved, led by the acquisition of Dynetics in January 2020. With Leidos Holdings generating almost half of its revenues from the Defense Solutions segment, a steady order growth from the Pentagon and other U.S. allies is also expected to have boosted defense revenues.
We expect these trends to have continued in the third quarter as well, which is likely to have boosted Leidos Holdings’ top line in the soon-to-be-reported quarter. In line with this, the Zacks Consensus Estimate for third-quarter revenues is pegged at $3.18 billion, which indicates a rise of 12% from the year-ago quarter’s reported figure.
The CARES Act enabled the company to defer its federal and some state income tax payments from the second quarter of 2020 to the third quarter. The deferral is likely to have pushed up expenses for the company. Moreover, the impacts of the ongoing pandemic have been leading to volume reductions on the company’s existing and new programs, which in turn are likely to have hurt its third-quarter earnings.
The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.25, which indicates a decline of 8.1% from the year-ago quarter’s reported figure.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Leidos Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.
Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here is a defense company you may want to consider as it has the right combination of elements to post an earnings beat in its upcoming release:
L3Harris Technologies Inc. (LHX - Free Report) has an Earnings ESP of +0.57% and a Zacks Rank #3. The company will announce third-quarter 2020 earnings on Oct 30.
Recent Defense Releases
Lockheed Martin (LMT - Free Report) reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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What's in Store for Leidos Holdings' (LDOS) Q3 Earnings?
Leidos Holdings, Inc. (LDOS - Free Report) is scheduled to release third-quarter 2020 results on Nov 2, before market open. In the last reported quarter, the company delivered an earnings surprise of 44.86%.
Moreover, Leidos Holdings delivered an earnings surprise of 16.50%, on average, in the trailing four quarters.
Let’s discuss how things have shaped ahead of the announcement.
Factors at Play
In May 2020, Leidos Holdings acquired L3Harris Technologies' Security Detection and Automation businesses for $1 billion. Positive synergies from this buyout are expected to have boosted the company’s third-quarter revenues.
Furthermore, over the past couple of quarters, revenues for the company's Defense Solutions segment have improved, led by the acquisition of Dynetics in January 2020. With Leidos Holdings generating almost half of its revenues from the Defense Solutions segment, a steady order growth from the Pentagon and other U.S. allies is also expected to have boosted defense revenues.
We expect these trends to have continued in the third quarter as well, which is likely to have boosted Leidos Holdings’ top line in the soon-to-be-reported quarter. In line with this, the Zacks Consensus Estimate for third-quarter revenues is pegged at $3.18 billion, which indicates a rise of 12% from the year-ago quarter’s reported figure.
The CARES Act enabled the company to defer its federal and some state income tax payments from the second quarter of 2020 to the third quarter. The deferral is likely to have pushed up expenses for the company. Moreover, the impacts of the ongoing pandemic have been leading to volume reductions on the company’s existing and new programs, which in turn are likely to have hurt its third-quarter earnings.
The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.25, which indicates a decline of 8.1% from the year-ago quarter’s reported figure.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Leidos Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.
Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Leidos Holdings carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Leidos Holdings, Inc. Price and EPS Surprise
Leidos Holdings, Inc. price-eps-surprise | Leidos Holdings, Inc. Quote
Stocks to Consider
Here is a defense company you may want to consider as it has the right combination of elements to post an earnings beat in its upcoming release:
L3Harris Technologies Inc. (LHX - Free Report) has an Earnings ESP of +0.57% and a Zacks Rank #3. The company will announce third-quarter 2020 earnings on Oct 30.
Recent Defense Releases
Lockheed Martin (LMT - Free Report) reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>