Kratos Defense & Security Solutions, Inc. KTOS reported third-quarter 2024 adjusted earnings of 11 cents per share, down 8.3% from 12 cents reported in the prior-year quarter. The bottom line, however, surpassed the Zacks Consensus Estimate of 8 cents by 37.5%.

Kratos Defense reported GAAP earnings of 2 cents per share against a loss of a penny in the third quarter of 2023.

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Total Revenues

Total revenues were $275.9 million, which missed the Zacks Consensus Estimate of $278 million by 0.9%. The figure, however, rose 0.5% from $275.9 million recorded in the year-ago quarter.

The year-over-year improvement can be attributed to the Unmanned Systems segment’s revenue growth.

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

Operational Update

Kratos Defense’s selling, general and administrative expenses increased 0.8% year over year. Research and development expenses declined 3.9%. Depreciation expenses and expenses related to the amortization of intangible assets surged 31.6% and 46.7%, respectively.

The company reported operating income of $6.5 million, which declined from the year-ago quarter’s $12.2 million.

It posted a consolidated book-to-bill ratio of 1.0-1.0, with bookings worth $267.2 million.

The total backlog at the end of the third quarter was $1.29 billion compared with $1.30 billion at the end of the second quarter of 2024.

Segmental Performance

Unmanned Systems: Net revenues improved 13.2% year over year to $64.2 million.

Kratos Government Solutions: Net revenues decreased 2.8% to $211.7 million on a year-over-year basis.

Financial Details

As of Sept. 30, 2024, cash and cash equivalents totaled $301.5 million, up from $72.8 million as of Dec. 31, 2023. The long-term debt amounted to $177 million as of Sept. 30, 2024, down from $219.3 million recorded as of Dec. 31, 2023.

During the first nine months of 2024, cash flow from operating activities totaled $4.1 million against cash outflow of $2.2 million in the previous year.

Guidance

Kratos Defense has provided its outlook for the fourth quarter and reiterated its 2024 guidance. For the fourth quarter, it expects revenues to be in the $270-$295 million range. The Zacks Consensus Estimate for revenues is pegged at $293 million, higher than the mid-point of the company’s guided range.

For 2024, Kratos Defense still expects revenues to be in the range of $1.13-$1.15 billion. The consensus estimate for revenues is pegged at $1.15 billion, in line with the higher end of the company’s projected range.

Zacks Rank

Kratos Defense currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Hexcel Corporation HXL reported third-quarter 2024 adjusted earnings of 47 cents per share, which improved 23.7% from the year-ago figure of 38 cents. The bottom line also surpassed the Zacks Consensus Estimate by 2.2%.

In the third quarter, the company’s net sales totaled $456.5 million, which beat the Zacks Consensus Estimate of $456.2 million by 0.1%. The top line also witnessed an improvement of 8.8% from the year-ago quarter’s reported sales of $419.5 million.

Lockheed Martin Corporation LMT reported third-quarter 2024 adjusted earnings of $6.84 per share, which beat the Zacks Consensus Estimate of $6.47 by 5.7%. The bottom line also rose 1% from the year-ago quarter's recorded figure of $6.77.

Net sales were $17.10 billion, which missed the Zacks Consensus Estimate of $17.28 billion by 1%. The top line, however, increased 1.3% from $16.88 billion reported in the year-ago quarter.

RTX Corporation’s RTX third-quarter 2024 adjusted earnings per share of $1.45 beat the Zacks Consensus Estimate of $1.33 by 9%. The bottom line also improved 16% from the year-ago level of $1.25.

RTX’s third-quarter sales totaled $20.09 billion, which surpassed the Zacks Consensus Estimate of $19.91 billion by 0.9%. The top line also surged a solid 49.2% from $13.46 billion recorded in the third quarter of 2023.

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