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Leidos Holdings (LDOS) to Post Q2 Earnings: What's in Store?

Zacks Equity Research

Leidos Holdings, Inc. LDOS is scheduled to report second-quarter 2019 results on Jul 30, before market open. In the last reported quarter, the company delivered an earnings beat of 14.14%. Furthermore, it has average four-quarter positive surprise of 6.81%.

Given this backdrop, let’s delve deeper to find out the factors likely to have a bearing on the company’s second-quarter results.

Factors to Influence Q2

Leidos Holdings generates almost 50% of its revenues from the Defense Solutions segment. Notably, contracts awarded by the U.S. Department of Defense (DoD) are the major growth drivers for revenue growth at the Defense Solutions segment. With the current U.S. administration in favor of spending abundantly on the nation’s defense, this segment has been witnessing accelerated growth in recent times. We may expect the upcoming quarterly results to reflect this trend. In line with this, the Zacks Consensus Estimate for this unit’s second-quarter revenues is pegged at $1,303 million, suggesting a 3.7% improvement from the year-ago quarter’s reported figure.

With no government shutdown during the second quarter, we may expect the company’s Civil segment to reflect solid top-line performance. As the majority of the segments are projected to report impressive revenue growth, the Zacks Consensus Estimate for Leidos Holdings’ total revenues stands at $2.64 billion, indicating 4.3% growth from the year-ago quarter’s reported figure.

Coming to projections for the company’s bottom line, it is imperative to mention that adjusted operating margin across all of its segments suffered a decline in the first quarter on account of lower levels of net profit write-ups. Expecting a similar trend to persist in the soon-to-be-reported quarter, bottom-line growth expectations for Leidos Holdings remain bleak.

The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.10, implying a 1.8% decline from the prior-year quarter’s reported figure.

Leidos Holdings, Inc. Price and EPS Surprise

Leidos Holdings, Inc. Price and EPS Surprise

 

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

Earnings Whisper

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Leidos Holdings has an Earnings ESP of 0.00%.

Zacks Rank: The company carries a Zacks Rank #3.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Upcoming Defense Releases

Investors can consider the following players from the Aerospace sector that have the right combination of elements to beat on earnings in the next releases.

Moog Inc. MOG.A is expected to report third-quarter fiscal 2019 results on Jul 26. The company has an Earnings ESP of +0.76% and a Zacks Rank #3.

Ducommun Incorporated DCO is expected to report second-quarter 2019 results on Aug 5. The company has an Earnings ESP of +12.05% and a Zacks Rank #3.

A Recent Defense Release

Teledyne Technologies TDY reported second-quarter 2019 earnings of $2.80 per share, which surpassed the Zacks Consensus Estimate of $2.40 by 16.7%. The bottom line also improved 20.7% from the year-ago quarter’s figure of $2.32.

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Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
 
Ducommun Incorporated (DCO) : Free Stock Analysis Report
 
Moog Inc. (MOG.A) : Free Stock Analysis Report
 
Teledyne Technologies Incorporated (TDY) : Free Stock Analysis Report
 
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