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Kratos Defense & Security Solutions, Inc (KTOS) Surges 17% on Earnings

KTOS stock is notching new 52-week highs amid earnings crush

Kratos Defense & Security Solutions, Inc (NASDAQ:KTOS) reported earnings that wooed the Street Friday, and KTOS stock is surging 17% in late Friday trading as a result.

Kratos Defense & Security Solutions, Inc (KTOS) Surges 17% on EarningsAccording to Kratos, the company reportedly lost $10 million, or 1 cent per share on an adjusted-basis, on $167.8 million in revenue in its first quarter. Both metrics topped the Street’s estimates, which called for a loss of 6 cents on sales of $159.6 million.

Q1 revenues were up just shy of 10% year-over-year, while its $10.6 million in adjusted Ebitda doubled the year-ago period. Earnings, too, were well up from the 13-cent loss KTOS posted in Q1 2016, giving the company its fourth straight earnings beat.

The company guided for revenue in the range of $170 million to $176 million, with full-year revenue coming in between $700 million and $720 million. Here’s what Kratos CEO Eric DeMarco had to say:

“Kratos’ performance in the first quarter exceeded our expectations, including continued strength and customer demand in our Satellite Communications, Cyber Security, Technology and Training division. This division had a full year and fourth quarter 2016 book to bill ratio of 1.2 to 1.0 that we are now executing on. Kratos’ Satellite Communication business, the largest in our Company, is seeing strength across virtually every capability area, and we are forecasting this strong performance to continue going forward due to increasing bandwidth demands, and threats to U.S. space based assets.”

DeMarco also boasted about strong customer demand in the Cyber Security and Training Systems areas, where several large new program awards from 2016 are beginning to ramp up. He also believes another large contract award is on the way in 2017.

The government-focused defense fim made progress in the area of unmanned drones, working with Dynetics to design and develop the Gremlin Tactical UAS. On UAS, which is critical, DeMarco said:

“In 2016, Kratos returned to growth, and we expect that growth to continue and to accelerate in 2017.  In a few select areas, including satellite communications, microwave electronics, high performance UASs and training systems we believe that we are extremely well positioned, having the right products at the right price point to address mission critical National Security priority areas.”

As of this writing, KTOS stock is still up 21% for the year-to-date.

John Kilhefner is the deputy managing editor of InvestorPlace.com. He does not hold a position in any of the aforementioned securities. Follow him on Twitter at @jkilhefner.


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/kratos-defense-security-solutions-inc-ktos-isnt-so-bad-after-all/.

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