Shares of Kratos Defense & Security Solutions, Inc. KTOS dropped 3.5% to reach $27.50 on Feb 26, reflecting skepticism of investors following the company's lower-than-expected fourth-quarter results.The company reported fourth-quarter 2020 earnings of 8 cents per share, which missed the Zacks Consensus Estimate of 10 cents by 20%. The bottom line also declined 11.1% from the prior-year quarter’s earnings of 9 cents per share.Barring one-time adjustments, the company reported GAAP earnings of 62 cents per share for the fourth quarter of 2020, compared with 3 cents recorded in the year-ago quarter.For 2020, the company reported adjusted earnings of 33 cents per share, compared with 30 cents in 2019.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 Total RevenuesTotal revenues amounted to $206.4 million in the fourth quarter, which missed the Zacks Consensus Estimate of $219 million by 5.6%. Revenues however improved 11.5% from $185.1 million reported in the year-ago quarter. The year-over-year upside was led by organic growth in Kratos Unmanned Systems, Space and Satellite, Microwave Products, as well as Defense and Rocket Support Systems businesses.For 2020, the company recorded revenues worth $747.7 million, compared with $717.5 million generated in 2019.Operational UpdateKratos’ operating expenses amounted to $45.3 million in the quarter compared with the prior-year quarter’s $39.1 million. Selling, general and administrative expenses were up 19.7%, while research and development expenses soared 52%.The company reported fourth-quarter 2020 operating income of $9 million compared with operating income of $9.3 million for the fourth quarter of 2019.Kratos reported fourth-quarter 2020 bookings of $254 million and a book-to-bill ratio of 1.2 to 1.0, with a backlog of $922.2 million as of Dec 31, 2020.Segmental PerformanceUnmanned Systems: Revenues during the fourth quarter improved 29.2% year over year to $49.5 million.Government Solutions: Revenues in the fourth quarter grew 6.9% year over year to $156.9 million.Financial DetailsAs of Dec 31, 2020, cash and cash equivalents were $380.8 million compared with $172.6 million as of Dec 31, 2019.Long-term debt, including net of current portion, totaled $301 million as of Dec 31, 2020, up from $295.1 million as of Dec 31, 2019.At the end of 2020, cash generated from operating activities was $44.7 million compared with $28.9 million in 2019.2021 GuidanceFor first-quarter 2021, Kratos expects to generate revenues in the range of $185-$195 million. The Zacks Consensus Estimate for first-quarter revenues is pegged at $191.6 million, which lies above the midpoint of the company’s projected range.For 2021, the company expects revenues in the range of $810-$850 million. The Zacks Consensus Estimate for full-year revenues is pegged at $842.6 million, which lies above the midpoint of the company’s projected range.Zacks RankKratos currently carries a Zacks Rank #5 (Strong Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Other Defense Q4 ReleasesLockheed Martin Corp. LMT reported fourth-quarter 2020 earnings from continuing operations of $6.38 per share, which came in line with the Zacks Consensus Estimate.Hexcel Corporation HXL reported fourth-quarter 2020 loss of 18 cents per share, in line with the Zacks Consensus Estimate.General Dynamics Corporation GD reported fourth-quarter 2020 earnings from continuing operations of $3.49 per share, which missed the Zacks Consensus Estimate of $3.55 by 1.7%+1,500% Growth: One of 2021’s Most Exciting Investment OpportunitiesIn addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.Click here to download this report FREE >> 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 General Dynamics Corporation (GD): Get Free Report Lockheed Martin Corporation (LMT): Free Stock Analysis Report Hexcel Corporation (HXL): Free Stock Analysis Report Kratos Defense & Security Solutions, Inc. (KTOS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research