Kratos Defense (KTOS) Q3 Revenues Beat, Earnings Fall Y/Y
Kratos Defense & Security Solutions, Inc. KTOS shares have risen 1.8% to $10.99 since the company released its third-quarter 2022 results. This reflects investors’ optimism about the company’s quarterly results.
Kratos Defense reported third-quarter 2022 adjusted earnings of 8 cents per share, which declined 11.1% from the 9 cents per share reported in the prior-year quarter. The Zacks Consensus Estimate for third-quarter earnings is pegged at 2 cents per share.
Total Revenues
Total revenues were $228.6 million, which surpassed the Zacks Consensus Estimate of $227 million by 0.7%. Total revenues also increased 14% from $200.6 million 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 were up 11.6%, while research and development expenses surged 20% year over year. Moreover, depreciation expenses increased 18.1%, and expenses related to the amortization of intangible assets increased by a solid 172.8%.
KTOS reported a third-quarter 2022 operating loss of $3.6 million against an operating income of $10.5 million reported in the year-ago quarter.
Kratos Defense’s book-to-bill ratio for the third quarter of 2022 was 1.1 to 1.0, with bookings of $246.5 million for the same period.
The total backlog for Kratos Defense at the end of the third quarter of 2022 was $1.07 billion, up from $1.05 billion at the end of the second quarter of 2022.
Segmental Performance
Unmanned Systems: Net revenues in the third quarter decreased 18.4% year over year to $50 million.
Government Solutions: Net revenues in the third quarter increased 28.2% year over year to $178.6 million, mainly due to contributions from recently acquired Cosmic AES, CTT and SRE.
Financial Details
As of Sep 25, 2022, cash and cash equivalents were $125.2 million compared with $349.4 million as of Dec 26, 2021.
The long-term debt, including net of the current portion, totaled $292.6 million as of Sep 25, 2022, slightly down from $296.7 million as of Dec 26, 2021.
In the first nine months of 2022, the cash outflow from operating activities was $32.3 million against a cash inflow of $34.6 million in the prior-year period.
Guidance
For the fourth quarter of 2022, KTOS expects to generate revenues in the range of $231-$251 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $258.3 million, higher than the midpoint of the company’s projected range.
For 2022, the company currently expects revenues in the range of $880-900 million, down from the prior guidance range of $890-$930 million. The Zacks Consensus Estimate for full-year revenues stands at $905.8 million, higher than the midpoint of the company’s projected range.
Zacks Rank
Kratos Defense currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Curtiss-Wright Corporation CW reported third-quarter 2022 adjusted earnings of $2.07 per share, which surpassed the Zacks Consensus Estimate of $2.03 by 1.9%. The bottom line also surged 10% on a year-over-year basis.
In the quarter under review, the company’s net sales of $631 million went up 3% year over year. However, the top line missed the Zacks Consensus Estimate of $658 million by 4.2%.
Spirit AeroSystems Holdings, Inc. SPR reported a third-quarter 2022 adjusted loss of 25 cents per share, narrower than the Zacks Consensus Estimate for a loss of 39 cents. The bottom line improved significantly from the year-ago quarter’s loss of $1.13 per share.
Total revenues of $1,277 million lagged the Zacks Consensus Estimate of $1,295 million by 1.4%. However, the top line rose 30% on a year-over-year basis, driven by the higher production deliveries of the Boeing 737 and increased aftermarket revenues.
Leidos Holdings, Inc.’s LDOS third-quarter 2022 adjusted earnings of $1.59 per share beat the Zacks Consensus Estimate of $1.56 by 1.9%. However, the bottom line declined 11.7% from the $1.80 per share registered a year ago.
Leidos Holdings generated total revenues of $3,600 million in the quarter under consideration, exceeding the Zacks Consensus Estimate of $3,543.9 million by 1.6%. The top line also improved 4% year over year.
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