Kratos' (KTOS) Q3 Earnings Top Estimates, Revenues Up Y/Y
Shares of Kratos Defense & Security Solutions, Inc. KTOS increased 4% to reach $20.16 on Nov 3, reflecting optimism of investors following the company's solid Q3 results.
The company reported third-quarter 2020 earnings of 14 cents per share, which surpassed the Zacks Consensus Estimate of 9 cents by 55.6%. The bottom line, moreover, improved 7.7% from the prior-year quarter’s earnings of 13 cents per share.
Barring one-time adjustments, the company reported a GAAP earnings of 2 cents per share in the third quarter of 2020.
Total Revenues
Total revenues amounted to $202 million in the third quarter, in line with the Zacks Consensus Estimate. Revenues improved 9.7% from $184.1 million reported in the year-ago quarter. The year-over-year upside was led by revenues generated from higher product sales.
Operational Update
Kratos’ operating expenses amounted to $41.2 million in the quarter compared with the prior-year quarter’s $34 million. Selling, general and administrative expenses were up 12.6%, while research and development expenses soared 67.4%.
The company reported third-quarter 2020 operating income of $12.7 million compared with the operating income of $11.5 million reported in the third quarter of 2019.
Kratos reported third-quarter 2020 bookings of $356.7 million and a book-to-bill ratio of 1.8 to 1.0, with a backlog of $873.1 million as of Sep 27, 2020.
Kratos Defense Security Solutions, Inc. Price, Consensus and EPS Surprise
Segmental Performance
Unmanned Systems: Net sales during the third quarter improved 17.1% year over year to $53.5 million.
Government Solutions: Net sales in the third quarter grew 7.3% year over year to $148.5 million.
Financial Details
As of Sep 27, 2020, cash and cash equivalents were $374.7 million compared with $172.6 million as of Dec 31, 2019.
Long-term debt, including net of current portion, totaled $300.3 million as of Sep 27, 2020, up from $295.1 million as of Dec 31, 2019.
At the end of the first nine months of 2020, cash generated from operating activities summed $19.1 million compared with $30.2 million in the first nine months of 2019.
2020 Guidance
For 2020, the company affirms its revenue guidance of $740-$780 million. The Zacks Consensus Estimate for full-year sales is pegged at $761.7 million, which lies above the midpoint of the company’s projected range.
Zacks Rank
Kratos currently carries a Zacks Rank #4 (Sell).
Recent Defense Releases
Lockheed Martin , a Zacks Rank #3 (Hold) company, reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%. You can see .
The Boeing Company , a Zacks Rank #3 company, incurred adjusted loss of $1.39 per share for third-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of $2.33.
General Dynamics , a Zacks Rank #3 company, reported third-quarter 2020 earnings from continuing operations of $2.90 per share, which beat the Zacks Consensus Estimate of $2.85 by 1.8%.
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