Kratos (KTOS) Q3 Earnings: What To Expect

Aerospace and defense company Kratos (NASDAQ:KTOS) will be reporting results tomorrow afternoon. Here’s what investors should know.

Kratos beat analysts’ revenue expectations by 8.7% last quarter, reporting revenues of $300.1 million, up 16.8% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ organic revenue and earnings estimates.

Is Kratos a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Kratos’s revenue to be flat year on year at $277.2 million, slowing from the 20.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.08 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Kratos has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 6.5% on average.

Looking at Kratos’s peers in the defense contractors segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Mercury Systems delivered year-on-year revenue growth of 13%, beating analysts’ expectations by 12.5%, and Leidos reported revenues up 6.9%, topping estimates by 3%. Leidos traded up 9.4% following the results.

Read our full analysis of Mercury Systems’s results here and Leidos’s results here.

There has been positive sentiment among investors in the defense contractors segment, with share prices up 2.7% on average over the last month. Kratos is down 6.3% during the same time and is heading into earnings with an average analyst price target of $26.27 (compared to the current share price of $23.50).

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