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Leidos Holdings, Inc.’s (LDOS - Free Report) fourth-quarter 2023 adjusted earnings of $1.99 per share beat the Zacks Consensus Estimate of $1.73 by 15%. The bottom line also increased 8.7% from $1.83 registered in the prior-year quarter.
The year-over-year upside was driven by an improved program execution and reduced indirect spending across the company as well as increased volumes and higher incentive awards in the medical examination business.
The company reported GAAP earnings of $1.66 per share, up from the prior-year quarter’s level of $1.28.
For 2023, the company reported adjusted earnings of $7.30 per share, which beat the Zacks Consensus Estimate of $7.03 by 3.8%. The bottom line also increased from $6.60 registered a year ago.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings generated total revenues of $3.98 billion, which beat the Zacks Consensus Estimate of $3.79 million by 5%.
The top line also improved 7.7% year over year, driven by increased demand across all customer segments, especially Health.
For 2023, the company reported revenues of $15.44 billion, which beat the Zacks Consensus Estimate of $15.25 billion by 1.2%. The full-year revenues also increased 7.2% from $14.40 billion registered a year ago.
Backlog
The company recorded a total backlog of $39.96 billion, up from $38.04 billion recorded in the prior-year quarter. Of this amount, $8.80 billion was funded.
Operational Statistics
The cost of revenues increased 6.6% year over year to $3,385 million. The company reported an operating income of $361 million compared with $265 million in the year-ago quarter.
The operating margin was 9.1% compared with 7.2% in the prior-year period. Interest expenses totaled $49 million, down 3.9% year over year.
Segmental Performance
Defense Solutions: Net revenues in this segment improved 7% year over year to $2.21 billion. The increase can be attributed to higher revenue growth from digital modernization, including the Navy Next-Generation Enterprise Network Recompete Service Management, Integration and Transport contract, as well as offensive hypersonics programs. The acquisition of Cobham Special Missions and increased task order volume from the Sentinel program also benefited this unit’s revenues.
The operating income increased to $167 million from the year-ago quarter’s level of $132 million. The segment’s adjusted operating margin was 9%.
Health: The segment recorded revenues of $807 million, up 17% year over year. This improvement can be attributed to higher levels of medical examinations and growth from the Social Security Administration Information Technology Support Services Contract II.
The operating income totaled $147 million compared with $86 million in the year-ago quarter. The segment’s adjusted operating margin was 19%.
Civil: Revenues in this segment amounted to $961 million, up 2% year over year. The upside was due to higher infrastructure spending by the Federal Aviation Administration.
This segment recorded an operating income of $90 million compared with $74 million in the year-ago period. The segment’s adjusted operating margin was 10.8%.
Financials
Leidos Holdings’ cash and cash equivalents as of Dec 29, 2023, were $777 million compared with $516 million as of Dec 30, 2022.
The long-term debt, net of the current portion, amounted to $4,664 million as of Dec 29, 2023, compared with $3,928 million as of Dec 30, 2022.
Net cash flow from operating activities totaled $1,165 million at the end of 2023 compared with $992 million recorded a year ago.
2024 Guidance
Leidos Holdings has provided its 2024 guidance. The company expects to generate adjusted earnings in the range of $7.50-$7.90 per share. The Zacks Consensus Estimate for earnings is pegged at $7.48 per share, lower than the projected range.
LDOS projects 2024 revenues in the range of $15.7-$16.1 billion. The Zacks Consensus Estimate for revenues is pegged at $15.90 billion, in line with the midpoint of the guided range.
The company currently expects cash flow from operating activities to be approximately $1.1 billion during 2024.
Lockheed Martin Corporation (LMT - Free Report) reported fourth-quarter 2023 adjusted earnings of $7.90 per share, which beat the Zacks Consensus Estimate of $7.26 by 8.8%. The bottom line also improved 1.4% from the year-ago quarter's recorded figure.
Net sales were $18.87 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $17.98 billion by 4.9%. The top line, however, decreased 0.6% from $18.99 billion reported in the year-ago quarter.
General Dynamics Corporation (GD - Free Report) reported fourth-quarter 2023 earnings per share of $3.64, which missed the Zacks Consensus Estimate of $3.66 by 0.6%. However, the figure increased 1.7% from $3.58 recorded in the year-ago quarter.
In the quarter under review, revenues of $11,668 million beat the Zacks Consensus Estimate of $11,543 million by 1.1%. The top line also improved 7.5% from the prior-year reported figure.
Textron Inc. (TXT - Free Report) reported fourth-quarter 2023 adjusted earnings of $1.60 per share, which surpassed the Zacks Consensus Estimate of $1.53 by 4.6%. The bottom line also improved 30.1% from the year-ago quarter’s recorded figure.
TXT reported total revenues of $3,892 million, which missed the Zacks Consensus Estimate of $3,917.6 million by 0.7%. However, the reported figure increased 7% from the year-ago quarter’s level of $3,636 million.
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Leidos Holdings (LDOS) Q4 Earnings Top, Revenues Rise Y/Y
Leidos Holdings, Inc.’s (LDOS - Free Report) fourth-quarter 2023 adjusted earnings of $1.99 per share beat the Zacks Consensus Estimate of $1.73 by 15%. The bottom line also increased 8.7% from $1.83 registered in the prior-year quarter.
The year-over-year upside was driven by an improved program execution and reduced indirect spending across the company as well as increased volumes and higher incentive awards in the medical examination business.
The company reported GAAP earnings of $1.66 per share, up from the prior-year quarter’s level of $1.28.
For 2023, the company reported adjusted earnings of $7.30 per share, which beat the Zacks Consensus Estimate of $7.03 by 3.8%. The bottom line also increased from $6.60 registered a year ago.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. price-consensus-eps-surprise-chart | Leidos Holdings, Inc. Quote
Total Revenues
Leidos Holdings generated total revenues of $3.98 billion, which beat the Zacks Consensus Estimate of $3.79 million by 5%.
The top line also improved 7.7% year over year, driven by increased demand across all customer segments, especially Health.
For 2023, the company reported revenues of $15.44 billion, which beat the Zacks Consensus Estimate of $15.25 billion by 1.2%. The full-year revenues also increased 7.2% from $14.40 billion registered a year ago.
Backlog
The company recorded a total backlog of $39.96 billion, up from $38.04 billion recorded in the prior-year quarter. Of this amount, $8.80 billion was funded.
Operational Statistics
The cost of revenues increased 6.6% year over year to $3,385 million. The company reported an operating income of $361 million compared with $265 million in the year-ago quarter.
The operating margin was 9.1% compared with 7.2% in the prior-year period.
Interest expenses totaled $49 million, down 3.9% year over year.
Segmental Performance
Defense Solutions: Net revenues in this segment improved 7% year over year to $2.21 billion. The increase can be attributed to higher revenue growth from digital modernization, including the Navy Next-Generation Enterprise Network Recompete Service Management, Integration and Transport contract, as well as offensive hypersonics programs. The acquisition of Cobham Special Missions and increased task order volume from the Sentinel program also benefited this unit’s revenues.
The operating income increased to $167 million from the year-ago quarter’s level of $132 million. The segment’s adjusted operating margin was 9%.
Health: The segment recorded revenues of $807 million, up 17% year over year. This improvement can be attributed to higher levels of medical examinations and growth from the Social Security Administration Information Technology Support Services Contract II.
The operating income totaled $147 million compared with $86 million in the year-ago quarter. The segment’s adjusted operating margin was 19%.
Civil: Revenues in this segment amounted to $961 million, up 2% year over year. The upside was due to higher infrastructure spending by the Federal Aviation Administration.
This segment recorded an operating income of $90 million compared with $74 million in the year-ago period. The segment’s adjusted operating margin was 10.8%.
Financials
Leidos Holdings’ cash and cash equivalents as of Dec 29, 2023, were $777 million compared with $516 million as of Dec 30, 2022.
The long-term debt, net of the current portion, amounted to $4,664 million as of Dec 29, 2023, compared with $3,928 million as of Dec 30, 2022.
Net cash flow from operating activities totaled $1,165 million at the end of 2023 compared with $992 million recorded a year ago.
2024 Guidance
Leidos Holdings has provided its 2024 guidance. The company expects to generate adjusted earnings in the range of $7.50-$7.90 per share. The Zacks Consensus Estimate for earnings is pegged at $7.48 per share, lower than the projected range.
LDOS projects 2024 revenues in the range of $15.7-$16.1 billion. The Zacks Consensus Estimate for revenues is pegged at $15.90 billion, in line with the midpoint of the guided range.
The company currently expects cash flow from operating activities to be approximately $1.1 billion during 2024.
Zacks Rank
Leidos Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Lockheed Martin Corporation (LMT - Free Report) reported fourth-quarter 2023 adjusted earnings of $7.90 per share, which beat the Zacks Consensus Estimate of $7.26 by 8.8%. The bottom line also improved 1.4% from the year-ago quarter's recorded figure.
Net sales were $18.87 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $17.98 billion by 4.9%. The top line, however, decreased 0.6% from $18.99 billion reported in the year-ago quarter.
General Dynamics Corporation (GD - Free Report) reported fourth-quarter 2023 earnings per share of $3.64, which missed the Zacks Consensus Estimate of $3.66 by 0.6%. However, the figure increased 1.7% from $3.58 recorded in the year-ago quarter.
In the quarter under review, revenues of $11,668 million beat the Zacks Consensus Estimate of $11,543 million by 1.1%. The top line also improved 7.5% from the prior-year reported figure.
Textron Inc. (TXT - Free Report) reported fourth-quarter 2023 adjusted earnings of $1.60 per share, which surpassed the Zacks Consensus Estimate of $1.53 by 4.6%. The bottom line also improved 30.1% from the year-ago quarter’s recorded figure.
TXT reported total revenues of $3,892 million, which missed the Zacks Consensus Estimate of $3,917.6 million by 0.7%. However, the reported figure increased 7% from the year-ago quarter’s level of $3,636 million.