Benzinga | Aug 3, 2021 07:23AM EDT

Leidos Stock Falls On Missing Q2 EPS Estimates, Reiterates FY21 Guidance

* Leidos Holdings Inc (NYSE:LDOS) reported second-quarter FY21 revenue growth of 18.3% year-on-year to $3.45 billion, beating the analyst consensus of $3.38 billion. Revenue grew 16% organically.

* The most significant revenue contributors were the increase in veterans' disability examinations after the pause from the pandemic and the start-up of the Navy Next Generation IT contract.

* Defense Solutions' revenue rose 14.1% Y/Y to $2 billion, and its operating margin remained consistent at 6.8%.

* Civil revenue increased 5.4% Y/Y to $799 million, and the segment's operating margin contracted 340 bps to 6.9%.

* Health revenue expanded 61.7% Y/Y to $645 million. The operating margin expanded by 1,630 bps to 16.6%.

* Net bookings totaled $3.8 billion in Q2, representing a book-to-bill ratio of 1.1. As a result, the backlog was $33.5 billion.

* The operating margin contracted 70 bps to 7.8%. The adjusted EBITDA margin contracted 140 bps to 10.4%.

* Non-GAAP EPS of $1.52 missed the analyst consensus of $1.58.

* Leidos held $338 million in cash and equivalents. The company generated $17 million in operating cash flow during the quarter.

* Outlook: Leidos reaffirmed FY21 revenue guidance of $13.7 billion- $14.1 billion versus the analyst consensus of $13.96 billion.

* The non-GAAP EPS outlook is unchanged at $6.35 - $6.65 compared to the analyst consensus of $6.61.

* Price action: LDOS shares are trading lower by 1.97% at $105.00 in premarket trading on Tuesday.