RESTON, Va. - Leidos Holdings , Inc. (NYSE:LDOS), a leading innovation company, reported a strong second quarter with earnings and revenue surpassing analyst expectations, prompting the company to raise its full-year guidance. The firm's shares rose 2% in response to the positive financial results and outlook.
For the second quarter, Leidos posted adjusted earnings per share (EPS) of $2.63, outperforming the consensus estimate of $2.27. Revenue also exceeded expectations, coming in at $4.13 billion against the anticipated $4.06 billion, marking an 8% increase YoY. This growth was attributed to heightened demand across all customer segments, particularly in managed health services.
Leidos' CEO Thomas Bell highlighted the company's profitable growth and robust cash generation, crediting its operational priorities and commitment to its "Promises Made, Promises Kept" philosophy. Bell also emphasized the company's position to fulfill its commitments for the rest of the year and beyond, thanks to its collaborative innovation strategy and capabilities-based organization.
The company's net income for the quarter stood at $324 million, or $2.37 per diluted share, representing a significant YoY increase of 54% and 58%, respectively. Adjusted EBITDA saw a 33% rise from the same period last year, reaching $559 million, or a 13.5% margin. Leidos attributed the profitability boost to increased volumes, higher earned incentives on managed health services, and improved cost control.
In terms of guidance, Leidos has set its sights higher for the full year 2024, forecasting adjusted EPS to range between $8.60 and $9.00, compared to the analyst consensus of $8.82. Revenue projections were also raised to $16.1 billion to $16.4 billion, with the midpoint slightly below the consensus estimate of $16.25 billion.
The second quarter also saw Leidos generate $374 million in net cash from operating activities, with free cash flow reaching $351 million. The company continued to deliver shareholder value, returning $165 million through share repurchases and dividends.
Leidos' backlog remains robust at $36.5 billion, with $8.0 billion funded, following significant contract awards including a $823 million task order for the Defense Information Systems Agency and a $738 million contract with the U.S. Air Force.
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