Boston, MA 09/10/2014 (wallstreetpr) – Leidos Holdings Inc (NYSE:LDOS) posted revenues of $1.31 billion in the second quarter results comparable to $1.46 billion in 2Q2014. The operating loss of Leidos from continuing operations came at $410 million comparable to operating income of $10 million in 2Q2014. It was inclusive of intangible impairment charges and non-cash goodwill charges amounting to $510 million. Leidos reported the loss of $5.93 per diluted share comparable to earnings of $0.05 per diluted share in 2Q2014.
Goodwill impairment charges
Leidos Holdings Inc (NYSE:LDOS) $510 million of goodwill impairment charge comes as a big drawback in the second quarter results. As per Moody’s investors Service it is a negative development for the company that has reduced the goodwill asset by around 50%. It indicates Leidos will post weaker long-term cash earnings in the coming time. It is not encouraging for Leidos engineering and commercial health segment. Moody’s Investors expects Leidos revenues for the year to come in a range of $4.8 billion and $5.1 billion comparable to revenue of $5.5 billion a year ago. As of now, Leidos has got Moody’s senior unsecured rating of Baa3 with a negative outlook.
Dividend payout
Leidos Holdings Inc (NYSE:LDOS) announced dividend of $0.32 per share in second quarter results. It will be payable on October 30, 2014 ad of record date October 15, 2014. Leidos has plans to continue with its quarterly dividend payouts despite a fall in performance. The declaration of future dividends will be subject to the decision of Leidos’s Board of Directors and other factors like financial conditions, earnings and capital requirements. In 2Q2015, Leidos reported cash and cash equivalents of $358 million and long-term debt of $1.3 billion.
Management View
Roger Krone, the CEO of Leidos Holdings Inc (NYSE:LDOS), said that there was a decline in the sales pipeline in the engineering and commercial health segment. Due to the weakness in the sector, Leidos have to reappraise the long-term forecast leading to goodwill impairment charges.
