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Leidos Holdings, Inc.’s (LDOS - Free Report) first-quarter 2024 adjusted earnings of $2.29 per share beat the Zacks Consensus Estimate of $1.65 by 38.8%. The bottom line also increased 55.8% from $1.47 registered in the prior-year quarter.
The year-over-year upside was driven by increased volumes of fixed-rate managed health services and improved cost control across the company.
LDOS reported GAAP earnings of $2.07 per share, up from the prior-year quarter’s level of $1.17.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings generated total revenues of $3.98 billion, which beat the Zacks Consensus Estimate of $3.80 million by 4.7%.
The top line also improved 7.5% year over year, driven by increased demand across all customer segments, especially for managed health services.
Backlog
The company recorded a total backlog of $36.57 billion, down from $39.96 billion recorded in the fourth quarter of 2023. Of this amount, $7.97 billion was funded.
Operational Statistics
The cost of revenues increased 4.2% year over year to $3,337 million. The company reported an operating income of $415 million compared with $265 million in the year-ago quarter.
The operating margin was 10.4% compared with 7.2% in the prior-year period. Interest expenses totaled $49 million, down 9.3% year over year.
Segmental Performance
National Security and Digital: Net revenues in this segment improved 2% year over year to $1.79 billion. The increase can be attributed to increased volumes from the Sentinel contract and Defense Enclave Services (DES) program.
This segment’s adjusted operating income increased to $181 million from the year-ago quarter’s level of $157 million. The segment’s adjusted operating margin was 10.1%, up 120 basis points (bps) from the prior-year quarter’s figure of 8.9%.
Health & Civil: The segment recorded revenues of $1.20 billion, up 19% year over year. This improvement can be attributed to increased volumes and case complexity within the managed health services business.
This unit’s adjusted operating income totaled $228 million compared with $123 million in the year-ago quarter. The segment’s adjusted operating margin was 19%, up 680 bps year over year.
Commercial & International: Revenues in this segment amounted to $509 million, up 4% year over year. The upside was driven by increased deliveries of security products.
This segment recorded an adjusted operating income of $42 million compared with $23 million in the year-ago period. The adjusted operating margin was 8.3%, up 360 bps year over year.
Defense Systems: Revenues in this segment amounted to $474 million, up 7% year over year. The upside was driven by increased volumes within the airborne surveillance and reconnaissance and hypersonics businesses.
This segment recorded an adjusted operating income of $38 million compared with $43 million in the year-ago period. The adjusted operating margin was 8%, down 30 bps year over year.
Financials
Leidos Holdings’ cash and cash equivalents as of Mar 29, 2024, totaled $633 million compared with $777 million as of Dec 29, 2023.
The long-term debt, net of the current portion, amounted to $4.64 billion as of Mar 29, 2024, compared with $4.66 billion as of Dec 29, 2023.
Net cash flow from operating activities totaled $63 million at the end of the first quarter of 2024 against cash outflow from operating activities worth $98 million recorded a year ago.
2024 Guidance
Leidos Holdings has raised its 2024 guidance. The company now expects to generate adjusted earnings in the range of $8.40-$8.80 per share, up from the prior guidance of $7.50-$7.90. The Zacks Consensus Estimate for LDOS’ 2024 earnings is pegged at $7.77 per share, lower than the company’s projected range.
LDOS currently expects 2024 revenues in the band of $16.0-$16.4 billion, up from the earlier guided range of $15.7-$16.1 billion. The Zacks Consensus Estimate for revenues is pegged at $15.97 billion, lower than the company’s guided range.
LDOS currently expects 2024 cash flow from operating activities to be $1.3 billion, up from the prior projection of $1.1 billion.
General Dynamics Corporation (GD - Free Report) reported first-quarter 2024 earnings per share (EPS) of $2.88, which missed the Zacks Consensus Estimate of $2.89 by 0.4%. However, the figure increased 9.1% from $2.64 per share recorded in the year-ago quarter.
GD’s revenues of $10,731 million beat the Zacks Consensus Estimate of $10,201 million by 5.2%. The top line also improved 8.6% from the prior-year reported figure.
RTX Corporation’s (RTX - Free Report) first-quarter 2024 adjusted EPS of $1.34 beat the Zacks Consensus Estimate of $1.23 by 8.9%. The bottom line also improved 9.8% from the year-ago quarter’s level of $1.22.
RTX’s net sales were $19,305 million, which surpassed the Zacks Consensus Estimate of $18,412.6 million by 4.8%. The top line also improved 12% from $17,214 million recorded in the first quarter of 2023.
Lockheed Martin Corporation (LMT - Free Report) reported first-quarter 2024 adjusted earnings of $6.33 per share, which beat the Zacks Consensus Estimate of $5.80 by 9.1%. The bottom line, however, declined 1.6% from the year-ago quarter's recorded figure of $6.43.
LMT’s net sales were $17.20 billion, which surpassed the Zacks Consensus Estimate of $16.19 billion by 6.2%. The top line also increased 13.7% from $15.13 billion reported in the year-ago.
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Leidos Holdings (LDOS) Beats on Q1 Earnings, Ups '24 EPS View
Leidos Holdings, Inc.’s (LDOS - Free Report) first-quarter 2024 adjusted earnings of $2.29 per share beat the Zacks Consensus Estimate of $1.65 by 38.8%. The bottom line also increased 55.8% from $1.47 registered in the prior-year quarter.
The year-over-year upside was driven by increased volumes of fixed-rate managed health services and improved cost control across the company.
LDOS reported GAAP earnings of $2.07 per share, up from the prior-year quarter’s level of $1.17.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. price-consensus-eps-surprise-chart | Leidos Holdings, Inc. Quote
Total Revenues
Leidos Holdings generated total revenues of $3.98 billion, which beat the Zacks Consensus Estimate of $3.80 million by 4.7%.
The top line also improved 7.5% year over year, driven by increased demand across all customer segments, especially for managed health services.
Backlog
The company recorded a total backlog of $36.57 billion, down from $39.96 billion recorded in the fourth quarter of 2023. Of this amount, $7.97 billion was funded.
Operational Statistics
The cost of revenues increased 4.2% year over year to $3,337 million. The company reported an operating income of $415 million compared with $265 million in the year-ago quarter.
The operating margin was 10.4% compared with 7.2% in the prior-year period.
Interest expenses totaled $49 million, down 9.3% year over year.
Segmental Performance
National Security and Digital: Net revenues in this segment improved 2% year over year to $1.79 billion. The increase can be attributed to increased volumes from the Sentinel contract and Defense Enclave Services (DES) program.
This segment’s adjusted operating income increased to $181 million from the year-ago quarter’s level of $157 million. The segment’s adjusted operating margin was 10.1%, up 120 basis points (bps) from the prior-year quarter’s figure of 8.9%.
Health & Civil: The segment recorded revenues of $1.20 billion, up 19% year over year. This improvement can be attributed to increased volumes and case complexity within the managed health services business.
This unit’s adjusted operating income totaled $228 million compared with $123 million in the year-ago quarter. The segment’s adjusted operating margin was 19%, up 680 bps year over year.
Commercial & International: Revenues in this segment amounted to $509 million, up 4% year over year. The upside was driven by increased deliveries of security products.
This segment recorded an adjusted operating income of $42 million compared with $23 million in the year-ago period. The adjusted operating margin was 8.3%, up 360 bps year over year.
Defense Systems: Revenues in this segment amounted to $474 million, up 7% year over year. The upside was driven by increased volumes within the airborne surveillance and reconnaissance and hypersonics businesses.
This segment recorded an adjusted operating income of $38 million compared with $43 million in the year-ago period. The adjusted operating margin was 8%, down 30 bps year over year.
Financials
Leidos Holdings’ cash and cash equivalents as of Mar 29, 2024, totaled $633 million compared with $777 million as of Dec 29, 2023.
The long-term debt, net of the current portion, amounted to $4.64 billion as of Mar 29, 2024, compared with $4.66 billion as of Dec 29, 2023.
Net cash flow from operating activities totaled $63 million at the end of the first quarter of 2024 against cash outflow from operating activities worth $98 million recorded a year ago.
2024 Guidance
Leidos Holdings has raised its 2024 guidance. The company now expects to generate adjusted earnings in the range of $8.40-$8.80 per share, up from the prior guidance of $7.50-$7.90. The Zacks Consensus Estimate for LDOS’ 2024 earnings is pegged at $7.77 per share, lower than the company’s projected range.
LDOS currently expects 2024 revenues in the band of $16.0-$16.4 billion, up from the earlier guided range of $15.7-$16.1 billion. The Zacks Consensus Estimate for revenues is pegged at $15.97 billion, lower than the company’s guided range.
LDOS currently expects 2024 cash flow from operating activities to be $1.3 billion, up from the prior projection of $1.1 billion.
Zacks Rank
Leidos Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
General Dynamics Corporation (GD - Free Report) reported first-quarter 2024 earnings per share (EPS) of $2.88, which missed the Zacks Consensus Estimate of $2.89 by 0.4%. However, the figure increased 9.1% from $2.64 per share recorded in the year-ago quarter.
GD’s revenues of $10,731 million beat the Zacks Consensus Estimate of $10,201 million by 5.2%. The top line also improved 8.6% from the prior-year reported figure.
RTX Corporation’s (RTX - Free Report) first-quarter 2024 adjusted EPS of $1.34 beat the Zacks Consensus Estimate of $1.23 by 8.9%. The bottom line also improved 9.8% from the year-ago quarter’s level of $1.22.
RTX’s net sales were $19,305 million, which surpassed the Zacks Consensus Estimate of $18,412.6 million by 4.8%. The top line also improved 12% from $17,214 million recorded in the first quarter of 2023.
Lockheed Martin Corporation (LMT - Free Report) reported first-quarter 2024 adjusted earnings of $6.33 per share, which beat the Zacks Consensus Estimate of $5.80 by 9.1%. The bottom line, however, declined 1.6% from the year-ago quarter's recorded figure of $6.43.
LMT’s net sales were $17.20 billion, which surpassed the Zacks Consensus Estimate of $16.19 billion by 6.2%. The top line also increased 13.7% from $15.13 billion reported in the year-ago.