Leidos Holdings Inc (LDOS) has reported a 53.54 percent plunge in profit for the quarter ended Dec. 30, 2016. The company has earned $59 million, or $0.39 a share in the quarter, compared with $127 million, or $1.72 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $115 million, or $0.75 a share compared with $59 million or $0.80 a share, a year ago. Revenue during the quarter surged 101.01 percent to $2,575 million from $1,281 million in the previous year period. Gross margin for the quarter contracted 26 basis points over the previous year period to 12 percent. Total expenses were 94.10 percent of quarterly revenues, up from 92.04 percent for the same period last year. That has resulted in a contraction of 206 basis points in operating margin to 5.90 percent.
Operating income for the quarter was $152 million, compared with $102 million in the previous year period.
However, the adjusted operating income for the quarter stood at $240 million compared to $107 million in the prior year period. At the same time, adjusted operating margin improved 97 basis points in the quarter to 9.32 percent from 8.35 percent in the last year period.
Roger Krone, Leidos chairman and chief executive officer, commented: “I am pleased with our fourth quarter results and with a strong close to a successful and transformational year for the Company. Through the dedicated effort of our employees and the innovative solutions we bring to our customers, we were able to grow revenues, margins, earnings, and cash flow from operations, compared to the prior year. We are proceeding well against our stated targets and remain committed to building on our successes in the year ahead."
Leidos Holdings projects revenue to be in the range of $10,000 million to $10,400 million for financial year 2017. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $3.05 to $3.35 on adjusted basis.
Operating cash flow declines
Leidos Holdings Inc has generated cash of $446 million from operating activities during the year, down 19.06 percent or $105 million, when compared with the last year. Cash flow from investing activities was almost stable for the quarter at $26 million, when compared with the previous year period.
Cash flow from financing activities was almost stable for the quarter at $751 million, when compared with the previous year period.
Cash and cash equivalents stood at $376 million as on Dec. 30, 2016, down 42.68 percent or $280 million from $656 million on Jan. 01, 2016.
Debt increases substantially
Leidos Holdings Inc has witnessed an increase in total debt over the last one year. It stood at $3,287 million as on Dec. 30, 2016, up 204.07 percent or $2,206 million from $1,081 million on Jan. 01, 2016. Interest coverage ratio deteriorated to 3.90 for the quarter from 7.29 for the same period last year.
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