Leidos, Raytheon report sales, profit boosts

By Marjorie Censer  / October 25, 2018

Leidos said today sales during its most recent quarter hit $2.6 billion, up nearly 3 percent from the same three-month period a year earlier.

The contractor's quarterly profit reached $147 million, up about 79 percent from the prior year.

Leidos said its defense solutions business reported quarterly sales of almost $1.3 billion, up 4 percent from a year earlier.

"The revenue increase was primarily attributable to ramp up of volumes from new programs, partially offset by the completion of certain contracts," Leidos said.

Roger Krone, Leidos' chief executive, said during a call with analysts this morning he was not surprised by President Trump's recent comments that the defense budget will likely be $700 billion in fiscal year 2020.

"I think what he is trying to do -- as much as I can interpret his words -- is to set an expectation that it can't grow at the level that it did in '18 and '19 forever," he said. "From our standpoint, we've always sort of [taken] that into account, and a more metering of the topline is what was in our expectations.

"The budget is certainly significantly big enough for many companies like Leidos to be successful at the current funding level," Krone added.

Meanwhile, Raytheon reported today sales in its most recent quarter reached $6.8 billion, up 8 percent from the same period the prior year.

The contractor's quarterly profit hit $644 million, up 13 percent from the prior year.

While all of Raytheon's business units reported sales increases, its intelligence, information and services division recorded the largest jump, with a 13 percent sales boost in the quarter.

"The increase in net sales for the quarter was primarily driven by higher net sales on classified programs in both the cyber and space business areas, the Development, Operations and Maintenance (DOMino) cyber program, and the Warfighter FOCUS program," the company said.

In a call with analysts this morning, Tom Kennedy, Raytheon's chief executive, said the company is "following the direction and position of the U.S. administration" when it comes to Saudi Arabia. Arms sales to the country have come under scrutiny in the wake of the alleged murder of a U.S. resident.

"This is something that we've been watching very carefully," Kennedy said. "Our business . . . is not dependent on any one customer or one program or one franchise."