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Shares of Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) surged a solid 17% to reach $20.82 on Feb 15, reflecting investors’ optimism following the company’s latest report.
KTOS reported fourth-quarter 2023 adjusted earnings of 12 cents per share, up 50% from 8 cents reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of 8 cents by 50%.
Kratos Defense reported GAAP earnings of 2 cents per share against a loss of 7 cents per share in the fourth quarter of 2022.
For 2023, the company recorded adjusted earnings of 42 cents, up from 32 cents reported in 2022.
Kratos Defense & Security Solutions, Inc. Price, Consensus and EPS Surprise
Total revenues were $273.8 million, which surpassed the Zacks Consensus Estimate of $252 million by 8.6%. The figure also increased 9.8% from $249.3 million recorded in the year-ago quarter.
The year-over-year improvement can be primarily attributed to the Kratos Government Solutions segment’s revenue growth.
For 2023, the company generated revenues worth $1.04 billion, up from the year-ago reported revenues of $0.90 billion.
Operational Update
Kratos Defense’s selling, general and administrative expenses went up 9% year over year, while research and development expenses were down 24.5%. Depreciation expenses increased 31.3%, while expenses related to the amortization of intangible assets surged 109.1%.
The company reported fourth-quarter 2023 operating income of $11.7 million, up 185.4% from the year-ago quarter’s actuals.
The company posted consolidated book-to-bill ratio of 1.2-1.0, with bookings worth $330 million for the fourth quarter.
The total backlog at the end of the fourth quarter was $1.24 billion compared with $1.17 billion at the end of the third quarter.
Segmental Performance
Unmanned Systems: Net revenues improved 12.1% year over year to $100.8 million.
Government Solutions: Net revenues increased 8.5% year over year to $173 million.
Financial Details
As of Dec 31, 2023, cash and cash equivalents totaled $72.8 million, down from $81.3 million as of Dec 25, 2022. The long-term debt amounted to $219.3 million as of Dec 31, 2023, down from $250.2 million recorded as of Dec 25, 2022.
During 2023, cashflow from operating activities totaled $65.2 million against cash outflow of $25.6 million in the previous year.
Guidance
Kratos Defense has provided its outlook for first-quarter and full-year 2024. For the first quarter, it expects revenues in the $240-$260 million range. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $255.9 million, higher than the midpoint of the company’s guided range.
For 2024, Kratos Defense expects revenues in the range of $1,13-$1,15 million. The Zacks Consensus Estimate for full-year revenues is pegged at $1.10 billion, which lies lower than the company’s projected range.
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, 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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Kratos Defense (KTOS) Q4 Earnings Top, Revenues Rise Y/Y
Shares of Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) surged a solid 17% to reach $20.82 on Feb 15, reflecting investors’ optimism following the company’s latest report.
KTOS reported fourth-quarter 2023 adjusted earnings of 12 cents per share, up 50% from 8 cents reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of 8 cents by 50%.
Kratos Defense reported GAAP earnings of 2 cents per share against a loss of 7 cents per share in the fourth quarter of 2022.
For 2023, the company recorded adjusted earnings of 42 cents, up from 32 cents reported in 2022.
Kratos Defense & Security Solutions, Inc. Price, Consensus and EPS Surprise
Kratos Defense & Security Solutions, Inc. price-consensus-eps-surprise-chart | Kratos Defense & Security Solutions, Inc. Quote
Total Revenues
Total revenues were $273.8 million, which surpassed the Zacks Consensus Estimate of $252 million by 8.6%. The figure also increased 9.8% from $249.3 million recorded in the year-ago quarter.
The year-over-year improvement can be primarily attributed to the Kratos Government Solutions segment’s revenue growth.
For 2023, the company generated revenues worth $1.04 billion, up from the year-ago reported revenues of $0.90 billion.
Operational Update
Kratos Defense’s selling, general and administrative expenses went up 9% year over year, while research and development expenses were down 24.5%. Depreciation expenses increased 31.3%, while expenses related to the amortization of intangible assets surged 109.1%.
The company reported fourth-quarter 2023 operating income of $11.7 million, up 185.4% from the year-ago quarter’s actuals.
The company posted consolidated book-to-bill ratio of 1.2-1.0, with bookings worth $330 million for the fourth quarter.
The total backlog at the end of the fourth quarter was $1.24 billion compared with $1.17 billion at the end of the third quarter.
Segmental Performance
Unmanned Systems: Net revenues improved 12.1% year over year to $100.8 million.
Government Solutions: Net revenues increased 8.5% year over year to $173 million.
Financial Details
As of Dec 31, 2023, cash and cash equivalents totaled $72.8 million, down from $81.3 million as of Dec 25, 2022. The long-term debt amounted to $219.3 million as of Dec 31, 2023, down from $250.2 million recorded as of Dec 25, 2022.
During 2023, cashflow from operating activities totaled $65.2 million against cash outflow of $25.6 million in the previous year.
Guidance
Kratos Defense has provided its outlook for first-quarter and full-year 2024. For the first quarter, it expects revenues in the $240-$260 million range. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $255.9 million, higher than the midpoint of the company’s guided range.
For 2024, Kratos Defense expects revenues in the range of $1,13-$1,15 million. The Zacks Consensus Estimate for full-year revenues is pegged at $1.10 billion, which lies lower than the company’s projected range.
Zacks Rank
Kratos Defense currently has 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 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, 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.