Leidos reports 5.3 percent dip in quarterly sales

Leidos this week reported quarterly sales had dipped 5.3 percent compared to the same quarter the year before.

Overall sales for the quarter were $2.44 billion, compared to $2.58 billion in the prior-year quarter, the company said.

For its Defense Solutions business, Leidos reported quarterly sales down by $116 million, or 9 percent, compared to the same quarter the previous year.

"The revenue decrease was primarily attributable to timing of revenue recognition on certain contracts, the completion of certain contracts and net volume decreases, partially offset by revenues from new awards," the company said.

The decrease "is purely a timing item and we expect to recognize the revenue from this aspect of the contracts over the course of the next three quarters of 2018," Leidos Chief Financial Officer Jim Reagan said during a May 3 call with Wall Street analysts.

Leidos chief executive Roger Krone said the company had "always hinted that this year would start slower, because of some of the disappointments we had 12 months ago but all of the signs -- our performance, award-fee scores, our book to bill and frankly all the external factors relative to the Omnibus [spending bill] for the federal government and what we see in both defense and non-defense gives us confidence that our guidance is rock-solid and we feel really good about the prospects for the year."

Both Krone and Reagan spoke about how the company was beginning to see requests for proposals from the government for longer-term contracts.

"In the past, a lot of the bids we were submitting and being awarded tended to be . . . extensions because a lot of our procurement authorities that we deal with, instead of doing five-year awards, they weren't quite ready to do a major procurement so they'd give us an extension and those typically would be six months to 12 months," Krone said.

In the past quarter, though, Krone said, "We have been seeing the average duration go as much as . . . six months longer than the awards we had been getting last year, so . . . the average length of contracts and backlog is now growing as opposed to shrinking and that gives us better visibility into our revenue numbers for the year."