Leidos, Orbital ATK report increased sales, profit

By Marjorie Censer / February 22, 2018 at 10:53 AM

Leidos said today sales in 2017 hit $10.2 billion, up about 44 percent from $7 billion in 2016.

The company was buoyed by its acquisition of Lockheed Martin's IT services business, which it added in late summer 2016.

Leidos said its profit in 2017 reached $364 million, up nearly 48 percent from $246 million the prior year.

Roger Krone, the company's chief executive, said in a call with analysts this morning the company expects a "material reduction" in its overall tax rate as a result of the new tax legislation.

Leidos will invest more in its bid and proposal efforts and in technology and capital "to increase our advantage in offering innovative solutions," he said.

Asked about General Dynamics' deal to acquire CSRA, which would create a competitor nearly the size of Leidos, Krone said he's not surprised to see further consolidation in the government services industry.

"We don't think it's over," he said. "There’s opportunity for more consolidation."

Leidos also reported today sales in its defense solutions group reached nearly $5 billion in 2017, up about 29 percent from 2016.

"The revenue growth was primarily attributable to the acquired [Lockheed] business and growth in its airborne programs," the company said.

Meanwhile, Orbital ATK said today sales in 2017 hit $4.8 billion, up about 7 percent from 2016. The contractor's profit reached about $310 million, up close to 6 percent from the prior year.

The company, which has agreed to be acquired by Northrop Grumman, said sales in its defense group in 2017 were just shy of $2 billion, up about 8 percent from 2016. The unit's profit reached $193 million for the year, up almost 13 percent from the prior year.