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Leidos Holdings, Inc.’s (LDOS - Free Report) third-quarter 2020 adjusted earnings of $1.47 per share beat the Zacks Consensus Estimate of $1.25 by 17.6%. Moreover, the bottom line grew 8.1% from $1.36 per share reported in the year-ago period.
Further, the company’s GAAP earnings of $1.13 per share improved from the year-ago quarter’s $1.11.
Total Revenues
Leidos Holdings generated total revenues of $3,342 million in the quarter under consideration, which exceeded the Zacks Consensus Estimate of $3,176 million by 5.2%. The top line also improved 7.9% year over year, backed by growth across all segments.
Backlog
The company’s backlog at the end of the quarter was $31.7 billion, of which $6.8 billion was funded.
Operational Statistics
Total cost of revenues in the quarter increased 13.2% to $3,242 million. Operating income totaled $258 million, up 3.6% from the year-ago quarter’s figure.
Adjusted operating income margin for the quarter was 8% compared with 8.8% in the prior-year quarter.
Interest expenses were $44 million compared with $28 million in the prior-year quarter.
Segmental Performance
Defense Solutions: Net revenues in this segment improved 22% year over year to $1,951 million in the third quarter. This upside can be primarily attributed to revenues related to the acquisition of Dynetics, program wins and a net increase in program volumes.
Moreover, the segment’s operating income improved to $145 million from the year-ago quarter’s $107 million, while the operating margin expanded 70 basis points (bps) to 7.4%.
Health: The segment recorded revenues of $520 million in the third quarter, up 2.4% year over year. The improvement was primarily driven by a net increase in program volumes and program wins.
Operating income improved 19% to $75 million, while operating margin expanded 200 bps to 0.3%.
Civil: Revenues in this segment amounted to $771 million, up 5.2%. This uptick was primarily attributable to revenues related to the acquisition of the SD&A Businesses and program wins.
While operating income rose 25.6% to $54 million, operating margin expanded 110 bps to 10.3%.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Cash and cash equivalents as of Oct 2, 2020, were $512 million compared with $668 million as of Jan 3, 2020.
Long-term debt, net of current portion, amounted to $4,125 million as of Oct 2, 2020, compared with $2,925 million as of Jan 3, 2020.
Net cash provided by operating activities in the first nine months of 2020 was $1,386 million compared with $823 million provided in the first nine months of 2019.
2020 Guidance
Leidos Holdings revised its outlook for 2020. The company currently expects adjusted earnings in the $5.65-$5.85 per share range, up from $5.25-$5.55 anticipated earlier. The Zacks Consensus Estimate for 2020 earnings, pegged at $5.44 per share, is below the company’s projection.
Leidos Holdings currently expects revenues in the range of $12.3-$12.5 billion this year, from $12.2-$12.6 billion anticipated earlier. The Zacks Consensus Estimate for 2020 revenues, pegged at $12.41 billion, is above the midpoint of the company-guided range.
Lockheed Martin (LMT - Free Report) , a Zacks Rank #3 company, reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.
General Dynamics (GD - Free Report) , a Zacks Rank #4 (Sell) company, reported third-quarter 2020 earnings from continuing operations of $2.90 per share, which beat the Zacks Consensus Estimate of $2.85 by 1.8%.
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. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Leidos Holdings (LDOS) Q3 Earnings Beat, 2020 EPS View Raised
Leidos Holdings, Inc.’s (LDOS - Free Report) third-quarter 2020 adjusted earnings of $1.47 per share beat the Zacks Consensus Estimate of $1.25 by 17.6%. Moreover, the bottom line grew 8.1% from $1.36 per share reported in the year-ago period.
Further, the company’s GAAP earnings of $1.13 per share improved from the year-ago quarter’s $1.11.
Total Revenues
Leidos Holdings generated total revenues of $3,342 million in the quarter under consideration, which exceeded the Zacks Consensus Estimate of $3,176 million by 5.2%. The top line also improved 7.9% year over year, backed by growth across all segments.
Backlog
The company’s backlog at the end of the quarter was $31.7 billion, of which $6.8 billion was funded.
Operational Statistics
Total cost of revenues in the quarter increased 13.2% to $3,242 million. Operating income totaled $258 million, up 3.6% from the year-ago quarter’s figure.
Adjusted operating income margin for the quarter was 8% compared with 8.8% in the prior-year quarter.
Interest expenses were $44 million compared with $28 million in the prior-year quarter.
Segmental Performance
Defense Solutions: Net revenues in this segment improved 22% year over year to $1,951 million in the third quarter. This upside can be primarily attributed to revenues related to the acquisition of Dynetics, program wins and a net increase in program volumes.
Moreover, the segment’s operating income improved to $145 million from the year-ago quarter’s $107 million, while the operating margin expanded 70 basis points (bps) to 7.4%.
Health: The segment recorded revenues of $520 million in the third quarter, up 2.4% year over year. The improvement was primarily driven by a net increase in program volumes and program wins.
Operating income improved 19% to $75 million, while operating margin expanded 200 bps to 0.3%.
Civil: Revenues in this segment amounted to $771 million, up 5.2%. This uptick was primarily attributable to revenues related to the acquisition of the SD&A Businesses and program wins.
While operating income rose 25.6% to $54 million, operating margin expanded 110 bps to 10.3%.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. price-consensus-eps-surprise-chart | Leidos Holdings, Inc. Quote
Financials
Cash and cash equivalents as of Oct 2, 2020, were $512 million compared with $668 million as of Jan 3, 2020.
Long-term debt, net of current portion, amounted to $4,125 million as of Oct 2, 2020, compared with $2,925 million as of Jan 3, 2020.
Net cash provided by operating activities in the first nine months of 2020 was $1,386 million compared with $823 million provided in the first nine months of 2019.
2020 Guidance
Leidos Holdings revised its outlook for 2020. The company currently expects adjusted earnings in the $5.65-$5.85 per share range, up from $5.25-$5.55 anticipated earlier. The Zacks Consensus Estimate for 2020 earnings, pegged at $5.44 per share, is below the company’s projection.
Leidos Holdings currently expects revenues in the range of $12.3-$12.5 billion this year, from $12.2-$12.6 billion anticipated earlier. The Zacks Consensus Estimate for 2020 revenues, pegged at $12.41 billion, is above the midpoint of the company-guided range.
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) , a Zacks Rank #3 company, reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.
General Dynamics (GD - Free Report) , a Zacks Rank #4 (Sell) company, reported third-quarter 2020 earnings from continuing operations of $2.90 per share, which beat the Zacks Consensus Estimate of $2.85 by 1.8%.
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. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>