Leidos Shares Surge on Earnings That Beat Expectations and Raised Guidance

RESTON, Va. - Leidos Holdings, Inc. (NYSE:LDOS) shares rose 4% after posting third-quarter earnings that significantly exceeded analyst expectations and raising its annual guidance. The defense and technology services provider reported adjusted earnings of $2.93 per share, well above the analyst consensus of $2.01. Revenue for the quarter came in at $4.19 billion, surpassing forecasts of $4.07 billion and representing a 7% year-over-year increase.

Leidos CEO Tom Bell attributed the strong performance to "the continued improvement in operational performance across all segments," leading to "excellent revenue growth, record margins for net income and adjusted EBITDA, significant earnings growth, strong cash flow, and solid orders." The company's adjusted EBITDA margin rose to a record 14.2%, up from 11.5% in the same quarter last year. Net income for the quarter was $362 million, or $2.68 per diluted share, an increase compared to a net loss in the same period last year.

Looking ahead, Leidos raised its annual guidance. The company now expects earnings per share for fiscal year 2024 to be between $9.80 and $10.00; this is above the previous analyst consensus of $9.08. Annual revenue is projected to be between $16.35 billion and $16.45 billion, exceeding the consensus estimate of $16.3 billion.

Bell expressed confidence in the company's outlook, stating, "With a healthy balance sheet, improving business development performance, and the emerging 'North Star' strategy, Leidos is well-positioned to deliver strong and sustainable returns as we move forward."

The company reported strong orders of $8.1 billion for the quarter, representing a 1.9 order-to-billing ratio. This raised the total order backlog to $40.6 billion at the end of the quarter.

Leidos also announced a 5.3% increase in its quarterly dividend to $0.40 per share, payable to shareholders of record on December 16, 2024, with payment on December 31, 2024.