Leidos Reports Mixed Q3 Results, Narrows FY21 Revenue Outlook

Leidos Holdings Inc LDOS reported third-quarter FY21 revenue growth of 7% year-on-year to $3.48 billion, missing the consensus of $3.60 billion. Revenue grew 6% 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 3% Y/Y to $2.01 billion. Civil revenue increased 3% Y/Y to $792 million. Health revenue expanded 31% Y/Y to $682 million.
Net bookings totaled $4.7 billion in Q3, representing a book-to-bill ratio of 1.4. As a result, the backlog was $34.7 billion.
The operating margin expanded 80 bps to 8.8%. The adjusted EBITDA margin expanded by 90 bps to 11.6%.
Non-GAAP EPS of $1.80 beat the consensus of $1.62.
Leidos held $587 million in cash and equivalents. The company generated $565 million in operating cash flow during the quarter.
Outlook: Leidos narrowed FY21 revenue guidance from $13.7 billion - $14.1 billion to $13.7 billion - $13.9 billion below the consensus of $14.01 billion.
Leidos raised the non-GAAP EPS outlook from $6.35 - $6.65 to $6.55 - $6.75 above the consensus of $6.53.
Price Action: LDOS shares closed higher by 1.17% at $101.15 on Monday.

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