Kratos Defense (KTOS) Best Estimates First Quarter Earnings, Revenue Increase – May 12, 2022

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Shares of Defense and Security Solutions Kratos, Inc. (KTO Free Report) have fallen 8.1% to $12.87 since the company reported its first quarter 2022 results on May 6.

Kratos Defense reported adjusted earnings of 4 cents per share in the first quarter of 2022, which beat Zacks’ consensus estimate of one cent by 300%. However, net income was down 33.3% from the 6 cents per share reported in the year-ago quarter.

Kratos Defense reported a GAAP loss of 12 cents per share compared to gains of one cent reported in the year-ago quarter.

Total revenue

Total revenue was $196.2 million, in line with Zacks’ consensus estimate. Total revenue increased 1% from $194.2 million in the prior year quarter.

Operational update

Kratos Defense’s SG&A expenses increased 14.2%, while research and development expenses increased 15% year-over-year. At the same time, depreciation charges increased by 8.3%, while expenditure on acquisitions and restructuring-related items increased by 200%.

KTOS announced an operating loss of $1.2 million in the first quarter of 2022 compared to an operating profit of $4.9 million recorded in the year-ago quarter.

Kratos Defense’s order-to-bill ratio for the first quarter of 2022 was 1.0 to 1.0, with bookings of $198.2 million for the same period.

Kratos Defense’s total backlog at the end of Q1 2022 was $982.1 million, compared to $953.9 million at the end of Q4 2021.

Sector performance

Unmanned systems:First-quarter net revenue decreased 5.9% year-over-year to $52.6 million.

Government solutions:First-quarter net revenue increased 3.8% year-over-year to $143.6 million, primarily due to contributions from recently acquired Cosmic AES and CTT.

Financial details

As of March 27, 2022, cash and cash equivalents were $254.4 million, compared to $349.4 million as of December 26, 2021.

Long-term debt, including net of the current portion, totaled $295 million as of March 27, 2022, down slightly from $296.7 million as of December 26, 2021.

In the first quarter, cash used in operating activities was $7.9 million, compared to cash inflows of $22.7 million in the same period a year earlier.

Orientation

For the second quarter of 2022, KTOS expects to generate revenue in the range of $205-215 million. Zacks’ consensus estimate for second-quarter revenue is pegged at $210.5 million, which is the midpoint of the company’s projected range.

For 2022, the company continues to expect revenue of between $880 million and $920 million. Zacks’ consensus estimate for full-year revenue is $893.7 million, which is near the lower end of the company’s projected range.

Zacks Rank

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

Recent Defense Publications

Lockheed Martin (LMT Free Report) reported Q1 2022 earnings of $6.44 per share, which beat Zacks’ consensus estimate of $6.22 by 3.5%. However, net income was down 1.8% year-on-year.

Lockheed Martin ended the first quarter of 2022 (March 27, 2022) with an order backlog of $134.23 billion, compared to $135.36 billion at the end of the fourth quarter of 2021. LMT’s operating cash at the end of the first quarter of 2022 was $1.41 billion compared to $1.75 billion a year ago.

Raytheon Technologies‘ (RTX Free Report) first-quarter 2022 adjusted earnings per share (EPS) of $1.15 beat Zacks’ consensus estimate of $1.01 by 13.9%. Its sales of $15,716 million missed Zacks consensus estimate of $15,799 million by 0.5%.

Raytheon Technologies had cash and cash equivalents of $6,040 million as of March 31, 2022, compared to $7,832 million as of December 31, 2021. RTX expects adjusted EPS to be between $4.60 and $4.80 .

Hexcel Corporation (HXL Free Report) reported adjusted earnings of 22 cents per share in the first quarter of 2022, which beat Zacks’ consensus estimate of 17 cents by 29.4%.

Hexcel’s net sales in the first quarter totaled $390.6 million, which beat Zacks’ consensus estimate of $362 million by 7.9%. HXL currently expects to generate sales in the range of $1.50 billion to $1.63 billion in 2022.

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