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Leidos Holdings (LDOS) Q3 Earnings Surpass, Revenues Lag
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Leidos Holdings, Inc. (LDOS - Free Report) posted third-quarter 2018 adjusted earnings of $1.14 per share, beating the Zacks Consensus Estimate of $1.10 by 3.6%. The bottom line also increased 20% from the year-ago number of 95 cents per share.
The company reported GAAP earnings per share of 96 cents in the reported quarter, which soared 81.1% from the year-ago figure of 53 cents.
Total Revenues
Leidos Holdings’ total revenues reaped $2,575 million in the quarter under consideration, which missed the Zacks Consensus Estimate of $2,636 million by 2.3%. However, the reported figure rose 2.9% year over year.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
At the end of third-quarter 2018, the company’s backlog of signed business orders was $20.3 billion, of which $6.2 billion was funded.
Operational Statistics
Total cost of revenues in the reported quarter increased by 1.8% to $2,174 million. Operating income was $203 million compared with $151 million in the year-ago period.
Operating margin increased to 7.9% from 6% in the prior-year quarter, primarily owing to a favorable contract mix along with decreases in integration and restructuring costs.
Interest expenses were $35 million, in line with the year-earlier quarter’s figure.
Segment Performance
Defense Solutions: Net sales at the segment improved 4% to $1,249 million from the prior-year figure of $1,201 million. This upside was primarily attributable to ramped up volumes from new programs, which was partially offset by the completion of certain contracts.
Also, operating income improved to $88 million from the year-ago income of $80 million with the operating margin having expanded 30 basis points (bps) to 7%.
Health: The segment recorded net sales of $444 million in the comparable quarter last year, down 4.3%. This downtrend was primarily on the completion of certain contracts, coupled with lower level of commercial health revenues.
Operating income also decreased 17.5% to $52 million along with the operating margin contracting 190 bps to 11.7%.
Civil: Net sales at the segment were $882 million, up 5.3%. This uptick was primarily owing to expanded volumes from new programs.
Operating income also skyrocketed 86% to $93 million along with the operating margin expanding 450 bps to 10.5%.
Financials
Cash and cash equivalents as of Sep 28, 2018 were $515 million compared with $390 million as of Dec 29, 2017. Net cash provided by operating activities in the third quarter was $371 million compared with $267 million a year ago.
2018 Guidance
For 2018, Leidos Holdings has updated its outlook. The company expects its earnings to be in the range of $4.20 to $4.40 per share versus the prior range of $4.15 to $4.50. Revenues are expected between $10.1 billion and $10.3 billion compared with the prior range of $10.25 billion to $10.65 billion.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin have been raised to the range of 10.2-10.4% compared with the prior range of 10.1% to 10.4%. The company has also provided its projection for cash flow by operating activities at $775 million or more compared with previous guidance of at or above $675 million.
Zacks Rank
Leidos Holdings currently has a Zacks Rank #4 (Sell).
Aerojet Rocketdyne Holdings, Inc. is expected to report third-quarter 2018 results on Nov 1. The Zacks Consensus Estimate for the quarterly earnings is pegged at 30 cents per share.
Transdigm Group Incorporated (TDG - Free Report) is set to release fourth-quarter fiscal 2018 results on Nov 8. The Zacks Consensus Estimate for the quarterly earnings stands at $4.27 per share.
FLIR System, Inc. is scheduled to announce third-quarter 2018 results on Oct 30. The Zacks Consensus Estimate for the quarterly earnings is predicted at 57 cents per share.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Leidos Holdings (LDOS) Q3 Earnings Surpass, Revenues Lag
Leidos Holdings, Inc. (LDOS - Free Report) posted third-quarter 2018 adjusted earnings of $1.14 per share, beating the Zacks Consensus Estimate of $1.10 by 3.6%. The bottom line also increased 20% from the year-ago number of 95 cents per share.
The company reported GAAP earnings per share of 96 cents in the reported quarter, which soared 81.1% from the year-ago figure of 53 cents.
Total Revenues
Leidos Holdings’ total revenues reaped $2,575 million in the quarter under consideration, which missed the Zacks Consensus Estimate of $2,636 million by 2.3%. However, the reported figure rose 2.9% year over year.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. Price, Consensus and EPS Surprise | Leidos Holdings, Inc. Quote
Backlog
At the end of third-quarter 2018, the company’s backlog of signed business orders was $20.3 billion, of which $6.2 billion was funded.
Operational Statistics
Total cost of revenues in the reported quarter increased by 1.8% to $2,174 million. Operating income was $203 million compared with $151 million in the year-ago period.
Operating margin increased to 7.9% from 6% in the prior-year quarter, primarily owing to a favorable contract mix along with decreases in integration and restructuring costs.
Interest expenses were $35 million, in line with the year-earlier quarter’s figure.
Segment Performance
Defense Solutions: Net sales at the segment improved 4% to $1,249 million from the prior-year figure of $1,201 million. This upside was primarily attributable to ramped up volumes from new programs, which was partially offset by the completion of certain contracts.
Also, operating income improved to $88 million from the year-ago income of $80 million with the operating margin having expanded 30 basis points (bps) to 7%.
Health: The segment recorded net sales of $444 million in the comparable quarter last year, down 4.3%. This downtrend was primarily on the completion of certain contracts, coupled with lower level of commercial health revenues.
Operating income also decreased 17.5% to $52 million along with the operating margin contracting 190 bps to 11.7%.
Civil: Net sales at the segment were $882 million, up 5.3%. This uptick was primarily owing to expanded volumes from new programs.
Operating income also skyrocketed 86% to $93 million along with the operating margin expanding 450 bps to 10.5%.
Financials
Cash and cash equivalents as of Sep 28, 2018 were $515 million compared with $390 million as of Dec 29, 2017. Net cash provided by operating activities in the third quarter was $371 million compared with $267 million a year ago.
2018 Guidance
For 2018, Leidos Holdings has updated its outlook. The company expects its earnings to be in the range of $4.20 to $4.40 per share versus the prior range of $4.15 to $4.50. Revenues are expected between $10.1 billion and $10.3 billion compared with the prior range of $10.25 billion to $10.65 billion.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin have been raised to the range of 10.2-10.4% compared with the prior range of 10.1% to 10.4%. The company has also provided its projection for cash flow by operating activities at $775 million or more compared with previous guidance of at or above $675 million.
Zacks Rank
Leidos Holdings currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Defense Releases
Aerojet Rocketdyne Holdings, Inc. is expected to report third-quarter 2018 results on Nov 1. The Zacks Consensus Estimate for the quarterly earnings is pegged at 30 cents per share.
Transdigm Group Incorporated (TDG - Free Report) is set to release fourth-quarter fiscal 2018 results on Nov 8. The Zacks Consensus Estimate for the quarterly earnings stands at $4.27 per share.
FLIR System, Inc. is scheduled to announce third-quarter 2018 results on Oct 30. The Zacks Consensus Estimate for the quarterly earnings is predicted at 57 cents per share.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>