Kratos Defense (KTOS) Q3 Earnings Top, Revenues Rise Y/Y
Kratos Defense & Security Solutions, Inc. KTOS reported third-quarter 2023 adjusted earnings of 12 cents per share, up 50% from 8 cents reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of 8 cents by 50%.
The company reported a GAAP loss of 1 cent per share compared with a loss of 6 cents in the third quarter of 2022.
Total Revenues
Total revenues were $274.6 million, which surpassed the Zacks Consensus Estimate of $252 million by 9%. Total revenues also increased 20.1% from $228.6 million recorded in the year-ago quarter.
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 SG&A expenses and research and development expenses were up 7.5% and 7.3%, respectively, year over year. Depreciation expenses increased 46.2%, while expenses related to the amortization of intangible assets declined 50%.
The company reported a third-quarter 2023 operating income of $12.2 million against an operating loss of $3.6 million in the year-ago quarter.
The consolidated book-to-bill ratio was recorded in the band of 1.0-1.0, with bookings worth $282.3 million for the third quarter.
The total backlog at the end of the reported quarter was $1.17 billion compared with $1.16 billion at the end of the second quarter.
Segmental Performance
Unmanned Systems: Net revenues declined 13.4% year over year to $56.7 million.
Government Solutions: Net revenues increased 22% year over year to $217.9 million.
Financial Details
As of Oct 1, 2023, cash and cash equivalents totaled $42.2 million, down from $81.3 million as of Dec 25, 2022. The long-term debt amounted to $234.2 million as of Oct 1, 2023, down from $250.2 million recorded as of Dec 25, 2022.
During the first nine months of 2023, cash outflow from operating activities totaled $2.2 million compared with $32.3 million in the prior-year period.
Guidance
For the fourth quarter of 2023, KTOS expects revenues in the $237-$257 million range. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $251.9 million, higher than the midpoint of the company’s guided range.
For 2023, Kratos Defense now expects revenues in the range of $1,000-$1,020 million, up from the previous guidance in the band of $980-1,000 million range. The Zacks Consensus Estimate for full-year revenues is pegged at $1 billion, which lies at the high end of the company’s projected range.
Zacks Rank
Kratos Defense currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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