Defense contractor Leidos (NYSE: LDOS) will be reporting earnings this Tuesday before market hours. Here’s what to look for.
Leidos beat analysts’ revenue expectations by 4.1% last quarter, reporting revenues of $4.47 billion, up 6.7% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
Is Leidos a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, analysts are expecting Leidos’s revenue to decline 1.2% year on year to $4.31 billion, a reversal from the 9.7% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.61 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Leidos has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 3.3% on average.
Looking at Leidos’s peers in the defense contractors segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Mercury Systems delivered year-on-year revenue growth of 4.4%, beating analysts’ expectations by 10.4%, and RTX reported revenues up 12.1%, topping estimates by 7%. Mercury Systems traded down 22.3% following the results while RTX was up 2.7%.
Read our full analysis of Mercury Systems’s results here and RTX’s results here.
There has been positive sentiment among investors in the defense contractors segment, with share prices up 8.1% on average over the last month. Leidos is down 4.7% during the same time and is heading into earnings with an average analyst price target of $219.31 (compared to the current share price of $180.03).
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