Analyst Commentary

Leidos’ delayed realization of anticipated merger benefits highlights the risk inherent in large-scale M&A

Annual guidance implies a return to growth in 4Q17, yet Leidos may be delayed in realizing longer-term growth targets

Leidos (NYSE: LDOS) experienced declines across legacy and Lockheed Martin Information Systems & Global Solutions (IS&GS) revenue bases and remained pressured by elevated SG&A and integration costs in 3Q17, the one-year anniversary of its merger with IS&GS. A hold on annual guidance implies Leidos will recapture slight growth in 4Q17, yet during the company’s earnings call executives walked back from a ...

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