Leidos (LDOS) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research

April 24, 2024 at 1:27 p.m.·3 min read

Leidos Holdings, Inc. LDOS is scheduled to report first-quarter 2024 results on Apr 30, before market open.

Leidos has a four-quarter average earnings surprise of 11.85%. Strong revenue performance across the majority of its business segments is likely to have contributed to the overall performance of the company in the first quarter. However, higher interest expenses might have hurt the bottom line.

Factors to Consider

LDOS generates revenues from its three segments — Defense Solutions, Health and Civil.

Organic growth due to increased sales volume from programs like hypersonics and the Sentinel, along with positive synergies from the Cobham Special Mission acquisition, must have bolstered the Defense Solution’s revenue performance in the to-be-reported quarter.

Leidos Holdings, Inc. Price and EPS Surprise

Leidos Holdings, Inc. price-eps-surprise | Leidos Holdings, Inc. Quote

Solid revenues from contracts won in the prior quarters can be expected to have boosted the top-line performance of the Health and Civil business segments.

The expected strong financial results in each of LDOS’ segments must have aided the company’s overall top line in the first quarter.

A strong top-line expectation, along with improved program execution and disciplined cost management initiatives taken by LDOS, is likely to have boosted Leidos' bottom line in the quarter to be reported. However, higher interest expense might have had some negative impact on LDOS’ overall earnings performance.

Q1 Estimates

The Zacks Consensus Estimate for LDOS’ first-quarter revenues is pegged at $3.80 billion, indicating an increase of 2.7% from the year-ago quarter’s level.

The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.65 per share, indicating an improvement of 12.2% from the prior-year quarter’s reported figure.

Projections Suggest Growth

The strong demand for Leidos products can be gauged by its backlog strength. Our model expects Leidos’ backlog to increase 1.8% to $35.73 billion in the first quarter.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for LDOS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is the case here, as you will see below.

Leidos has an Earnings ESP of +1.86% and a Zacks Rank #2 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Below are three other defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.

Huntington Ingalls Industries Inc HII is slated to release first-quarter results on May 2. HII has an Earnings ESP of +2.33% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntington Ingalls delivered a four-quarter average earnings surprise of 20.64%. The consensus estimate for first-quarter earnings is pegged at $3.49 per share, while that for sales is pinned at $2.80 billion.

L3Harris Technologies LHX is scheduled to release first-quarter results on Apr 25. LHX has an Earnings ESP of +0.53% and a Zacks Rank #3 at present.

L3Harris delivered a four-quarter average earnings surprise of 1.53%. The Zacks Consensus Estimate for LHX’s first-quarter earnings is pegged at $2.89 per share, while that for sales is pinned at $5.11 billion.

CurtissWright CW is slated to report first-quarter results on May 1. CW has an Earnings ESP of +0.23% and a Zacks Rank #2 at present.

CW delivered a four-quarter average earnings surprise of 7.71%. The consensus mark for CW’s first-quarter earnings is pegged at $1.75 per share, while that for sales is pinned at $665 million.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Huntington Ingalls Industries, Inc. (HII) : Free Stock Analysis Report

Curtiss-Wright Corporation (CW) : Free Stock Analysis Report

Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report

L3Harris Technologies Inc (LHX) : Free Stock Analysis Report

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