Leidos Holdings, Inc. (LDOS - Free Report) posted third-quarter 2016 adjusted earnings of $1.25 per share, beating the Zacks Consensus Estimate of 95 cents by 31.6%. Reported earnings also surged 71.2% from the year-ago figure of 73 cents.
Leidos Holdings reported total revenue of $1,868 million in the third quarter, which missed the Zacks Consensus Estimate of $1,886 million by 1%. Reported revenues were, however, up 43.5% year over year.
At the end of the third quarter, the company’s backlog of signed business orders was $18.7 billion, of which $5.6 billion was funded. Total backlog includes $454.0 million of reduction due to the adverse impact of foreign currency movements between the U.S. dollar and the British pound.
Total cost of revenues in the quarter increased 43.2% to $1,630 million. Operating income was $101.0 million, compared to $94.0 million in the year-ago quarter.
Interest expenses were $28.0 million, up from $15.0 million in the year-ago quarter.
National Security Solutions: Net sales at the segment improved 4.9% to $921 million from the prior-year figure of $878 million. Operating income improved to $91 million from the year-ago tally of $78 million, with operating margin contracting 100 bps to 9.9%.
Health and Infrastructure Sector: The segment recorded net sales of $328 million in the reported quarter, down 21.5%. Operating income surged 215.4% to $41 million, while operating margin expanded 940 bps to 12.5%.
Information Systems & Global Solutions: Net sales at the segment were $620 million. Operating income was $26 million, while operating margin was 4.2%.
Cash and cash equivalents as of Sep 30, 2016 were $449 million, compared with $656 million as of Jan 1, 2016. Net cash flow from operating activity in the first nine months of 2016 was $284 million, compared with $378 million a year ago.
For 2016, the company revised its earnings guidance to the range of $3.50 to $3.60, compared to the prior guidance of $3.15–$3.35.
Revenues are now expected to be between $7.0 million and $7.1 billion, compared to the previous expectation of $6.8−$7.0 billion.
Adjusted EBITDA margin is still expected in the range of 8.5−9.0%. The company also reiterated its projection for cash flows provided by operating activities from continuing operations to $275 million or more.
Pentagon’s prime contractor Lockheed Martin Corp. (LMT - Free Report) reported third-quarter 2016 earnings of $3.61 per share, surpassing the Zacks Consensus Estimate of $2.86 by 26.2%. Earnings also increased 49.2% from the year-ago level, courtesy of strong revenue and operating margin growth.
Northrop Grumman Corporation (NOC - Free Report) reported third-quarter 2016 adjusted earnings of $3.35 per share, beating the Zacks Consensus Estimate of $2.81 by 19.2%. Reported earnings were also up 22% from $2.75 recorded in the year-ago quarter.
General Dynamics Corporation (GD - Free Report) announced third-quarter 2016 earnings from continuing operations of $2.48 per share, beating the Zacks Consensus Estimate of $2.37 by 4.6%. Reported earnings were also up 8.8% from $2.28 recorded in the year-ago quarter.
Leidos Holdings currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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