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What's in the Cards for Leidos Holdings' (LDOS) Q2 Earnings?

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Leidos Holdings, Inc. (LDOS - Free Report) is scheduled to release second-quarter 2021 results on Aug 3, before market open. In the last reported quarter, the company delivered an earnings surprise of 16.11%.

Leidos Holdings delivered an earnings surprise of 20.11%, on average, in the trailing four quarters.

Let’s discuss how things have shaped up ahead of the announcement.

Factors at Play

Positive synergies from acquisitions made in the past few quarters are expected to have boosted the company’s second-quarter revenues. Also, contract growth in recent times is anticipated to have benefited Leidos Holdings’ revenues in the soon-to-be-reported quarter.

The company delivered an autonomous vessel to the U.S. Navy, known as Seahawk, during the quarter. Revenues earned from such deliveries are also likely to have boosted Leidos Holdings’ second-quarter top-line performance.

In line with this, the Zacks Consensus Estimate for quarterly revenues is pegged at $3.34 billion, which indicates a rise of 14.6% from the year-ago quarter.

Keeping up with its recent trend, we expect Leidos Holdings to have witnessed high staff utilization, increased cost efficiencies on certain programs, reduced indirect costs and strong program execution across its entire business during the second quarter. This, in turn, might have bolstered the company’s quarterly earnings performance.

Moreover, benefits from the MSA legal matter can be expected to have contributed favorably to Leidos Holdings’ earnings growth in the soon-to-be-reported quarter.

The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $1.57, which suggests an improvement of 1.3% from the year-ago quarter.

Leidos Holdings, Inc. Price and EPS Surprise

Earnings Whispers

Our proven model predicts 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.

Earnings ESP: The company’s Earnings ESP is +4.46%. 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.

A Stock to Consider

Here is a stock you may want to consider, as it has the right combination of elements to post an earnings beat in its upcoming release:

L3Harris Technologies (LHX - Free Report) has an Earnings ESP of +0.43% and a Zacks Rank #3.

Recent Defense Releases

Raytheon Technologies’ (RTX - Free Report) second-quarter 2021 adjusted earnings per share (EPS) of $1.23 outpaced the Zacks Consensus Estimate of 92 cents by 33.7%.

General Dynamics (GD - Free Report) reported second-quarter 2021 earnings from continuing operations of $2.61 per share, which beat the Zacks Consensus Estimate of $2.52 by 3.6%.