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Leidos Holdings (LDOS) Misses on Q4 Earnings, Gives '17 View
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Leidos Holdings, Inc. (LDOS - Free Report) posted fourth-quarter 2016 adjusted earnings of 75 cents per share that missed the Zacks Consensus Estimate of 81 cents by 7.4%. Reported earnings also declined 6.7% from the year-ago figure of 80 cents.
Full-year earnings from continuing operations came in at $3.51 per share, which lagged the Zacks Consensus Estimate of $3.57 by 1.7%. However, earnings improved 18.6% year over year.
Total Revenue
Leidos Holdings reported total revenue of $2,575 million in the fourth quarter, which surpassed the Zacks Consensus Estimate of $2,571 million by 0.2%. Reported revenues also improved 101% year over year.
Full-year revenues were also up by 38.5% to $7,043 million. Moreover, the reported figure was in line with the Zacks Consensus Estimate.
Backlog
At the end of the 2016, the company’s backlog of signed business orders was $17.74 billion, of which $5.98 billion was funded. At 2015-end, total backlog was $9.90 billion, of which $2.52 billion was funded. The increase was primarily driven by the acquisition of the IS&GS Business.
Operational Statistics
Total cost of revenues in the quarter surged 101.6% to $2,266 million. Operating income was $152.0 million compared with $102.0 million in the year-ago quarter.
Interest expenses were $39.0 million, up from $14.0 million in the year-ago quarter.
Segment Performance
National Security Solutions: Net sales at the segment improved 3.3% to $876 million from the prior-year figure of $848 million. Also, operating income improved to $68 million from the year-ago tally of $65 million, with operating margin contracting 10 basis points (“bps”) to 7.8%.
Health and Infrastructure Sector: The segment recorded net sales of $348 million in the reported quarter, down 19.4%. Operating income was flat at $46 million, while operating margin expanded 260 bps to 13.2%.
Information Systems & Global Solutions: Net sales at the segment were $1,351 million. Operating income was $88 million, while operating margin was 6.5%.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Cash and cash equivalents as of Dec 31, 2016 were $376 million, compared with $656 million as of Jan 1, 2016. Net cash flow from operating activity in 2016 was $446 million, compared with $410 million a year ago.
Guidance
For 2017, the company expects earnings in the range of $3.05 to $3.35.
Revenues are projected to be in between $10.0 billion and $10.4 billion.
Adjusted EBITDA margin is expected in the range of 9.5−10.0%. The company also anticipates cash flows provided by operating activities from continuing operations to be $475 million or more.
Peer Releases
Pentagon’s prime contractor, Lockheed Martin Corp. (LMT - Free Report) , reported fourth-quarter 2016 earnings from continuing operations of $3.25 per share, which surpassed the Zacks Consensus Estimate of $3.04 by 6.9%. Earnings also increased 23.6% from the year-ago level, courtesy of strong revenues and operating margin growth.
Textron Inc. (TXT - Free Report) reported fourth-quarter 2016 adjusted earnings from continuing operations of 80 cents per share that missed the Zacks Consensus Estimate of 87 cents by 8%.
General Dynamics Corporation (GD - Free Report) reported fourth-quarter 2016 earnings from continuing operations of $2.62 per share, which beat the Zacks Consensus Estimate of $2.54 by 3.1%. Reported earnings were also up 9.2% from $2.40 recorded in the year-ago quarter.
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Leidos Holdings (LDOS) Misses on Q4 Earnings, Gives '17 View
Leidos Holdings, Inc. (LDOS - Free Report) posted fourth-quarter 2016 adjusted earnings of 75 cents per share that missed the Zacks Consensus Estimate of 81 cents by 7.4%. Reported earnings also declined 6.7% from the year-ago figure of 80 cents.
Full-year earnings from continuing operations came in at $3.51 per share, which lagged the Zacks Consensus Estimate of $3.57 by 1.7%. However, earnings improved 18.6% year over year.
Total Revenue
Leidos Holdings reported total revenue of $2,575 million in the fourth quarter, which surpassed the Zacks Consensus Estimate of $2,571 million by 0.2%. Reported revenues also improved 101% year over year.
Full-year revenues were also up by 38.5% to $7,043 million. Moreover, the reported figure was in line with the Zacks Consensus Estimate.
Backlog
At the end of the 2016, the company’s backlog of signed business orders was $17.74 billion, of which $5.98 billion was funded. At 2015-end, total backlog was $9.90 billion, of which $2.52 billion was funded. The increase was primarily driven by the acquisition of the IS&GS Business.
Operational Statistics
Total cost of revenues in the quarter surged 101.6% to $2,266 million. Operating income was $152.0 million compared with $102.0 million in the year-ago quarter.
Interest expenses were $39.0 million, up from $14.0 million in the year-ago quarter.
Segment Performance
National Security Solutions: Net sales at the segment improved 3.3% to $876 million from the prior-year figure of $848 million. Also, operating income improved to $68 million from the year-ago tally of $65 million, with operating margin contracting 10 basis points (“bps”) to 7.8%.
Health and Infrastructure Sector: The segment recorded net sales of $348 million in the reported quarter, down 19.4%. Operating income was flat at $46 million, while operating margin expanded 260 bps to 13.2%.
Information Systems & Global Solutions: Net sales at the segment were $1,351 million. Operating income was $88 million, while operating margin was 6.5%.
Leidos Holdings, Inc. Price, Consensus and EPS Surprise
Leidos Holdings, Inc. Price, Consensus and EPS Surprise | Leidos Holdings, Inc. Quote
Financials
Cash and cash equivalents as of Dec 31, 2016 were $376 million, compared with $656 million as of Jan 1, 2016. Net cash flow from operating activity in 2016 was $446 million, compared with $410 million a year ago.
Guidance
For 2017, the company expects earnings in the range of $3.05 to $3.35.
Revenues are projected to be in between $10.0 billion and $10.4 billion.
Adjusted EBITDA margin is expected in the range of 9.5−10.0%. The company also anticipates cash flows provided by operating activities from continuing operations to be $475 million or more.
Peer Releases
Pentagon’s prime contractor, Lockheed Martin Corp. (LMT - Free Report) , reported fourth-quarter 2016 earnings from continuing operations of $3.25 per share, which surpassed the Zacks Consensus Estimate of $3.04 by 6.9%. Earnings also increased 23.6% from the year-ago level, courtesy of strong revenues and operating margin growth.
Textron Inc. (TXT - Free Report) reported fourth-quarter 2016 adjusted earnings from continuing operations of 80 cents per share that missed the Zacks Consensus Estimate of 87 cents by 8%.
General Dynamics Corporation (GD - Free Report) reported fourth-quarter 2016 earnings from continuing operations of $2.62 per share, which beat the Zacks Consensus Estimate of $2.54 by 3.1%. Reported earnings were also up 9.2% from $2.40 recorded in the year-ago quarter.
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.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>