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Leidos Holdings, Inc.’s (LDOS - Free Report) third-quarter 2022 adjusted earnings of $1.59 per share beat the Zacks Consensus Estimate of $1.56 by 1.9%. However, the bottom line declined 11.7% from the $1.80 per share registered a year ago.
The company reported GAAP earnings of $1.17 per share, which decreased from the year-ago quarter’s earnings of $3.68.
Total Revenues
Leidos Holdings generated total revenues of $3,600 million in the quarter under consideration, exceeding the Zacks Consensus Estimate of $3,543.9 million by 1.6%. The top line also improved 4% year over year.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
At the end of the third quarter of 2022, the company’s total backlog was $35.02 billion, up from $34.72 billion at the second-quarter 2022 end. Of this, $7.43 billion was funded.
Operational Statistics
The total cost of revenues in the quarter increased by 5.2% to $3,095 million.
The operating income totaled $342 million compared with the year-ago quarter’s operating income of $376 million.
The operating income margin for the quarter was 9.5% compared with 10.8% in the prior-year quarter.
Interest expenses were $50 million, up 6.4% year over year.
Segmental Performance
Defense Solutions: Net revenues in this segment improved 3.3% year over year to $2,067 million in the third quarter. The increase can be attributed to higher Navy NGEN-R SMIT and various force protection programs.
However, the segment’s operating income decreased to $169 million from the year-ago quarter’s $176 million, with the operating margin being 8.1%. The decrease in the operating income was due to a program mix and investments in prototype development contracts.
Health: The segment recorded revenues of $659 million in the third quarter, which declined 3.4% year over year. The decrease in revenues was the result of increased volumes on the DHMSM program, the ramp-up of the Military and the increased backlog of disability exams caused by COVID-19.
The operating income was $99 million compared with the year-ago quarter’s income of $141 million. The operating margin came in at 15%.
Civil: Revenues in this segment amounted to $874 million, up 10.4%. The upside was driven by the ramp-up of the NASA AEGIS program.
While the operating income increased from $76 million to $96 million, the operating margin was 11%.
Financials
LDOS’ cash and cash equivalents as of Sep 30, 2022 were $807 million compared with $727 million as of Dec 31, 2021.
The long-term debt, net of the current portion, amounted to $3,975 million as of Sep 30, 2022, compared with $4,593 million as of Dec 31, 2021.
Net cash provided by operating activities during the first nine months of 2022 was $881 million compared with $821 million a year ago.
2022 Guidance
Leidos Holdings updated its 2022 view. The company now expects to generate adjusted earnings in the range of $6.20-$6.40 per share compared with the prior expectation in the band of $6.10-$6.50 per share.
The Zacks Consensus Estimate for 2022 earnings, pegged at $6.35 per share, is higher than the midpoint of the guidance range.
Leidos Holdings now expects revenues in the range of $14.2-$14.4 billion compared with the prior guidance range of $13.9-$14.3 billion. The Zacks Consensus Estimate for 2022 revenues, pegged at $14.21 billion, is lower than the midpoint of the guided range.
The company maintained its cash flow from operating activities guidance and anticipates it to be at or more than $1 billion.
Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2022 earnings of $5.89 per share, which missed the Zacks Consensus Estimate of $6.09 by 3.3%. The bottom line declined by 11.2% from the $6.63 reported in the year-ago quarter.
In the third quarter of 2022, Northrop Grumman reported total sales of $9 billion, which missed the Zacks Consensus Estimate of $9.15 billion by 1.6%. However, sales increased by 3% from the year-ago quarter’s $8.7 billion.
Raytheon Technologies Corporation’s (RTX - Free Report) third-quarter 2022 adjusted earnings per share of $1.21 beat the Zacks Consensus Estimate of $1.11 by 9%. However, the bottom line dropped 4% from the year-ago quarter’s adjusted earnings of $1.26.
Raytheon Technologies’ third-quarter sales of $16,951 million missed the Zacks Consensus Estimate of $17,003 million by 0.3%. However, the sales figure rose 5% from the $16,213 million recorded in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 32 cents by 3.1%. The bottom line improved massively from the year-ago earnings of 8 cents per share, reflecting growth of a solid 153.8%.
Hexcel’s net sales totaled $364.7 million in the third quarter, which lagged the Zacks Consensus Estimate of $391 million by 6.8%. However, the top line witnessed an improvement of 9.3% from the year-ago quarter’s $333.8 million.
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Leidos Holdings (LDOS) Q3 Earnings Beat, Revenues Rise Y/Y
Leidos Holdings, Inc.’s (LDOS - Free Report) third-quarter 2022 adjusted earnings of $1.59 per share beat the Zacks Consensus Estimate of $1.56 by 1.9%. However, the bottom line declined 11.7% from the $1.80 per share registered a year ago.
The company reported GAAP earnings of $1.17 per share, which decreased from the year-ago quarter’s earnings of $3.68.
Total Revenues
Leidos Holdings generated total revenues of $3,600 million in the quarter under consideration, exceeding the Zacks Consensus Estimate of $3,543.9 million by 1.6%. The top line also improved 4% year over year.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. price-consensus-eps-surprise-chart | Leidos Holdings, Inc. Quote
Backlog
At the end of the third quarter of 2022, the company’s total backlog was $35.02 billion, up from $34.72 billion at the second-quarter 2022 end. Of this, $7.43 billion was funded.
Operational Statistics
The total cost of revenues in the quarter increased by 5.2% to $3,095 million.
The operating income totaled $342 million compared with the year-ago quarter’s operating income of $376 million.
The operating income margin for the quarter was 9.5% compared with 10.8% in the prior-year quarter.
Interest expenses were $50 million, up 6.4% year over year.
Segmental Performance
Defense Solutions: Net revenues in this segment improved 3.3% year over year to $2,067 million in the third quarter. The increase can be attributed to higher Navy NGEN-R SMIT and various force protection programs.
However, the segment’s operating income decreased to $169 million from the year-ago quarter’s $176 million, with the operating margin being 8.1%. The decrease in the operating income was due to a program mix and investments in prototype development contracts.
Health: The segment recorded revenues of $659 million in the third quarter, which declined 3.4% year over year. The decrease in revenues was the result of increased volumes on the DHMSM program, the ramp-up of the Military and the increased backlog of disability exams caused by COVID-19.
The operating income was $99 million compared with the year-ago quarter’s income of $141 million. The operating margin came in at 15%.
Civil: Revenues in this segment amounted to $874 million, up 10.4%. The upside was driven by the ramp-up of the NASA AEGIS program.
While the operating income increased from $76 million to $96 million, the operating margin was 11%.
Financials
LDOS’ cash and cash equivalents as of Sep 30, 2022 were $807 million compared with $727 million as of Dec 31, 2021.
The long-term debt, net of the current portion, amounted to $3,975 million as of Sep 30, 2022, compared with $4,593 million as of Dec 31, 2021.
Net cash provided by operating activities during the first nine months of 2022 was $881 million compared with $821 million a year ago.
2022 Guidance
Leidos Holdings updated its 2022 view. The company now expects to generate adjusted earnings in the range of $6.20-$6.40 per share compared with the prior expectation in the band of $6.10-$6.50 per share.
The Zacks Consensus Estimate for 2022 earnings, pegged at $6.35 per share, is higher than the midpoint of the guidance range.
Leidos Holdings now expects revenues in the range of $14.2-$14.4 billion compared with the prior guidance range of $13.9-$14.3 billion. The Zacks Consensus Estimate for 2022 revenues, pegged at $14.21 billion, is lower than the midpoint of the guided range.
The company maintained its cash flow from operating activities guidance and anticipates it to be at or more than $1 billion.
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
Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2022 earnings of $5.89 per share, which missed the Zacks Consensus Estimate of $6.09 by 3.3%. The bottom line declined by 11.2% from the $6.63 reported in the year-ago quarter.
In the third quarter of 2022, Northrop Grumman reported total sales of $9 billion, which missed the Zacks Consensus Estimate of $9.15 billion by 1.6%. However, sales increased by 3% from the year-ago quarter’s $8.7 billion.
Raytheon Technologies Corporation’s (RTX - Free Report) third-quarter 2022 adjusted earnings per share of $1.21 beat the Zacks Consensus Estimate of $1.11 by 9%. However, the bottom line dropped 4% from the year-ago quarter’s adjusted earnings of $1.26.
Raytheon Technologies’ third-quarter sales of $16,951 million missed the Zacks Consensus Estimate of $17,003 million by 0.3%. However, the sales figure rose 5% from the $16,213 million recorded in the year-ago quarter.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 32 cents by 3.1%. The bottom line improved massively from the year-ago earnings of 8 cents per share, reflecting growth of a solid 153.8%.
Hexcel’s net sales totaled $364.7 million in the third quarter, which lagged the Zacks Consensus Estimate of $391 million by 6.8%. However, the top line witnessed an improvement of 9.3% from the year-ago quarter’s $333.8 million.