Leidos Holdings, Inc. (LDOS Quick QuoteLDOS - Free Report) posted first-quarter 2017 adjusted earnings of 88 cents per share, beating the Zacks Consensus Estimate of 78 cents by 12.8%. Reported earnings also increased 22.2% from the year-ago figure of 72 cents.

Total Revenue

Leidos Holdings reported total revenue of $2,580 million in the first quarter, which surpassed the Zacks Consensus Estimate of $2,548.5 million by 1.2%. Reported revenues also improved 96.7% year over year.

Backlog

At the end of the first quarter, the company’s backlog of signed business orders was $16.9 billion, of which $4.9 billion was funded. Total backlog at the end of 2016 stood at $17.7 billion, of which $6 billion was funded.

Operational Statistics

Total cost of revenues in the quarter surged 96.7% to $2,270 million. Operating income was $141 million, compared with $89 million in the year-ago quarter.

Interest expenses were $34 million, up from $25 million in the year-ago quarter.

Segment Performance

Defense Solutions: Net sales at the segment improved 65.9% to $1,294 million from the prior-year figure of $780 million. Also, operating income improved to $79 million from the year-ago tally of $71 million, with operating margin contracting 300 basis points (“bps”) to 6.1%.

Health: The segment recorded net sales of $443 million in the reported quarter, up 159.1%. Operating income increased 193.8% to $47 million, while operating margin expanded 120 bps to 10.6%.

Civil: Net sales at the segment were $842 million, up 133.2%. Operating income grew 145.5% to $54 million, while operating margin was 6.4%.

Financials

Cash and cash equivalents as of Mar 31, 2017 were $206 million, compared with $376 million as of Dec 30, 2016. Net cash outflow from operating activity in the first quarter was $88 million, compared with outflow of $14 million a year ago.

Guidance

For 2017, the company reaffirmed its earnings in the range of $3.05 to $3.35.

Revenues are reiterated to be in between $10.0 billion and $10.4 billion.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin is still anticipated in the range of 9.5−10.0%. The company also reiterated its projection of cash flows provided by operating activities from continuing operations to be $475 million or more.

Peer Releases

Rockwell Collins Inc. reported financial results for second-quarter fiscal 2017 (ended Mar 31, 2017). The company’s adjusted earnings per share of $1.34 surpassed the Zacks Consensus Estimate of $1.31 by 2.3%. Reported earnings also grew 3.1% from $1.30 per share earned a year ago.

Pentagon’s prime contractor, Lockheed Martin Corp. (LMT Quick QuoteLMT - Free Report) reported first-quarter 2017 earnings from continuing operations of $3 per share, beating the Zacks Consensus Estimate of $2.76 by 8.7%. Earnings came in line with the year-ago period’s bottom line figure.

Textron Inc. (TXT Quick QuoteTXT - Free Report) reported first-quarter 2017 adjusted earnings from continuing operations of 46 cents per share in line with the Zacks Consensus Estimate.

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.

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