Leidos Holdings to Report Q2 Earnings: What's in the Cards?

Leidos Holdings, Inc. LDOS is scheduled to release second-quarter 2025 results on Aug. 5, before market open.

LDOS boasts a four-quarter average earnings surprise of 23.71%.

Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.

Factors Likely to Influence LDOS’ Q2 Results

Strong sales volumes from contracts won in prior quarters are likely to have boosted the National Security and Digital segment’s top-line performance in the second quarter. Positive synergy from the completion of the acquisition of Kudu Dynamics, a cyber company, must have also bolstered this unit’s revenues. 

The Zacks Consensus Estimate for this segment’s revenues is pegged at $1.86 billion, which indicates growth of 2.4% from the year-ago quarter’s figure.

Higher sales volumes, backed by increasing demand for the managed health services business, are likely to have boosted the Health & Civil segment’s top-line performance. 

The Zacks Consensus Estimate for this segment’s revenues is pegged at $1.28 billion, which indicates growth of 1.5% from the year-ago quarter’s figure.

Robust deliveries in the SES business, solid performance in commercial energy and increased volumes within the UK business may have boosted the Commercial & International unit’s top-line performance.

The Zacks Consensus Estimate for this segment’s revenues is pegged at $584.3 million, which calls for an increase of 4.1% from the year-ago quarter’s figure.

Increased activity in space sensing and hypersonic programs, fueled by heightened geopolitical tensions worldwide, is likely to have boosted the Defense Systems’ top line.

The Zacks Consensus Estimate for this segment’s revenues is pegged at $514.1 million, which indicates growth of 3.9% from the year-ago quarter’s figure.

Q2 Expectations for LDOS

The robust revenue performance in all four of its major business segments is likely to have bolstered LDOS’ overall top line.

The Zacks Consensus Estimate for revenues is pegged at $4.23 billion, indicating an increase of 2.4% from the year-ago level.

Solid sales growth expectations, along with a strong adjusted EBITDA margin, are likely to have contributed to the company’s bottom line. However, higher interest expenses owing to additional debt, as well as higher acquisition expenses involving the takeover of Kudu Dynamics, might have offset the positive impact of the factors benefiting second-quarter earnings. 

The Zacks Consensus Estimate for earnings is pegged at $2.63 per share, which is in line with the figure recorded a year ago.

Backlog Projections Suggest LDOS’ Growth

Our model expects Leidos’ backlog to increase 11.3% year over year to $40.61 billion.

What the Zacks Model Unveils for LDOS

Our proven model predicts an earnings beat for LDOS this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as you will see below.

Earnings ESP: LDOS has an Earnings ESP of +1.46%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Leidos carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Below we have mentioned players from the same industry that also have the right combination of elements to beat on earnings in the upcoming releases.

Dynatrace DT is slated to report its first-quarter fiscal 2025 results on Aug. 6, before market open. It has an Earnings ESP of +1.21% and a Zacks Rank of 3 at present. 

The Zacks Consensus Estimate for fiscal first-quarter sales is pegged at $466.1 million, which calls for a 16.8% improvement from the year-ago quarter’s figure. The consensus estimate for earnings stands at 38 cents per share.

CDW Corporation CDW is scheduled to report its second-quarter 2025 results on Aug. 6, before market open. It has an Earnings ESP of +2.41% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for sales is pegged at $5.51 billion, which indicates a 1.6% improvement from the year-ago quarter’s figure. The consensus estimate for earnings stands at $2.49 per share.

Genpact Limited G is expected to report its second-quarter 2025 results on Aug. 7, after market close. It has an Earnings ESP of +0.78% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for sales is pegged at $1.23 billion, which implies a 4.6% increase from the year-ago quarter’s figure. The consensus estimate for earnings stands at 85 cents per share.

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This article originally published on Zacks Investment Research (zacks.com).

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