Leidos Holdings, Inc. (LDOS - Free Report) posted second-quarter 2018 adjusted earnings of $1.12 per share, beating the Zacks Consensus Estimate of $1.05 by 6.7%. The reported number also increased 7.7% from the year-ago figure of $1.04.
The company reported GAAP earnings per share of 94 cents in the reported quarter, which increased 46.9% from the year-ago figure of 64 cents.
Leidos Holdings posted total revenues of $2,529 million in the quarter, which lagged the Zacks Consensus Estimate of $2,563 million by 1.3%. The reported figure also declined 1.6% year over year.
At the end of second-quarter 2018, the company’s backlog of signed business orders was $18.3 billion, of which $5.4 billion was funded. Total backlog at the end of the first quarter was $17.6 billion, of which $4.6 billion was funded.
Total cost of revenues in the reported quarter declined 1.7% to $2,152 million. Operating income was $199 million compared with $166 million in the year-ago quarter.
Operating margin increased to 7.9% from 6.5% in the prior year quarter, primarily due to favorable contract mix along with decreases in amortization of intangible assets as well as integration and restructuring costs.
Interest expenses were $35 million, up from $34 million in the year-ago quarter.
Defense Solutions: Net sales at the segment improved 1% to $1,256 million from the prior-year figure of $1,243 million. The increase was primarily attributable to new awards, timing of revenue recognition on certain contracts and improved program performance.
Also, operating income improved to $93 million from the year-ago income of $63 million, with operating margin expanding 230 basis points (bps) to 7.4%.
Health: The segment recorded net sales of $451 million in the reported quarter, down 0.7%. The decrease was primarily attributable to the completion of certain contracts.
Operating income also decreased 8.1% to $68 million along with operating margin contracting 120 bps to 15.1%.
Civil: Net sales at the segment were $822 million, down 6.1%. The decrease was primarily due to the completion of certain contracts and a net decrease in program volumes.
Operating income also decreased 7.6% to $61 million along with operating margin contracting 10 bps to 7.4%.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise