U.S. Markets closed
  • S&P Futures

    4,534.25
    +10.00 (+0.22%)
     
  • Dow Futures

    34,975.00
    +65.00 (+0.19%)
     
  • Nasdaq Futures

    15,082.50
    +49.00 (+0.33%)
     
  • Russell 2000 Futures

    2,061.90
    +2.70 (+0.13%)
     
  • Crude Oil

    86.55
    -0.41 (-0.47%)
     
  • Gold

    1,841.60
    -1.60 (-0.09%)
     
  • Silver

    24.24
    +0.01 (+0.04%)
     
  • EUR/USD

    1.1357
    +0.0010 (+0.0909%)
     
  • 10-Yr Bond

    1.8270
    -0.0380 (-2.04%)
     
  • Vix

    23.85
    +1.06 (+4.65%)
     
  • GBP/USD

    1.3627
    +0.0016 (+0.1145%)
     
  • USD/JPY

    114.3290
    -0.0240 (-0.0210%)
     
  • BTC-USD

    41,969.79
    -298.35 (-0.71%)
     
  • CMC Crypto 200

    994.87
    +0.13 (+0.01%)
     
  • FTSE 100

    7,589.66
    +26.11 (+0.35%)
     
  • Nikkei 225

    27,594.29
    +127.06 (+0.46%)
     

Kratos Defense (KTOS) Q3 Earnings Top Estimates, Revenues Lag

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Shares of Kratos Defense & Security Solutions, Inc. KTOS declined 4.8% to $22.17 on Nov 9, reflecting negative investor sentiments following the company’s third-quarter 2021 results.

The company reported third-quarter 2021 adjusted earnings of 9 cents per share, which beat the Zacks Consensus Estimate by 28.6%. The bottom line was flat year over year.

Kratos Defense reported a GAAP loss of 2 cents per share against an earnings of 2 cents reported in the prior-year quarter.

Total Revenues

Total revenues were $200.6 million, which lagged the Zacks Consensus Estimate of $203 million by 1.3%. Total revenues decreased 0.7% from $202 million in the year-ago quarter. The slight year-over-year downside was due to lower legacy government services revenues, and reduced revenues from certain international contracts in the Training Solutions business, partially offset by increased revenues in the Space, Satellite and Cyber business.

Kratos Defense & Security Solutions, Inc. Price, Consensus and EPS Surprise

Kratos Defense & Security Solutions, Inc. Price, Consensus and EPS Surprise
Kratos Defense & Security Solutions, Inc. Price, Consensus and EPS Surprise

Kratos Defense & Security Solutions, Inc. price-consensus-eps-surprise-chart | Kratos Defense & Security Solutions, Inc. Quote

Operational Update

Kratos Defense’s operating expenses were $50.1 million in the reported quarter compared with $44.4 million in the prior-year quarter. Selling, general and administrative expenses were up 19.6%, while research and development expenses increased 3.9% year over year.

The company reported third-quarter 2021 operating income of $10.5 million, down 17.3% from the year-ago quarter.

The company’s book-to-bill ratio for the third quarter of 2021 was 0.9 to 1.0 and 1.0 to 1.0 for 12 months ended Sep 26, 2021, with bookings of $770.9 million for the same period.

Total backlog for Kratos Defense at the end of the third quarter of 2021 was $839.1 million, down from $865.6 million at the end of the second quarter of 2021 and $873.1 million at the end of the third quarter of 2020.

Segmental Performance

Unmanned Systems: Net revenues during the third quarter increased 14.6% year over year to $61.3 million.

Government Solutions: Net revenues in the third quarter declined 6.2% year over year to $139.3million.

Financial Details

As of Sep 26, 2021, cash and cash equivalents were $369.9 million compared with $380.8 million as of Dec 27, 2020.

Long-term debt, including net of current portion, totaled $296.5 million as of Sep 26, 2021, down slightly from $301 million as of Dec 27, 2020.

As of Sep 26, 2021, cash generated from operating activities was $34.6 million compared with $19.1 million in the prior-year period.

Guidance

For fourth-quarter 2021, Kratos Defense expects to generate revenues in the range of $205 million to $215 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $209.3 million, which is almost in line with the mid-point of the company’s projected range.

For 2021, the company continues to expect revenues to be $805-$815 million. The Zacks Consensus Estimate for full-year revenues stands at $809.3 million, which is almost at par with the mid-point of the company’s projected range.

Zacks Rank

Kratos Defense currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Curtiss-Wright CW reported third-quarter 2021 adjusted earnings of $1.88 per share, which surpassed the Zacks Consensus Estimate of $1.80 by 4.4%.

Raytheon Technologies’ RTX third-quarter 2021 adjusted earnings per share (EPS) of $1.26 outpaced the Zacks Consensus Estimate of $1.07 by 17.8%.

Hexcel Corporation HXL reported third-quarter 2021 adjusted earnings of 13 cents per share, which exceeded the Zacks Consensus Estimate of 8 cents by 62.5%.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Hexcel Corporation (HXL) : Free Stock Analysis Report

CurtissWright Corporation (CW) : Free Stock Analysis Report

Kratos Defense & Security Solutions, Inc. (KTOS) : Free Stock Analysis Report

Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research