Why Leidos Holdings (LDOS) Is Tumbling

NEW YORK (TheStreet) -- Leidos Holdings (LDOS) is shedding value on Thursday after reporting weak fiscal 2015 guidance and announcing the departure of its chief operating officer.

By early afternoon, shares had dropped 16% to $36.26.

The national security and engineering company said it expects fiscal 2015 revenues between $4.9 billion and $5.1 billion with adjusted earnings of $2.35 to $2.55 a share.

For the year ending February 2015, analysts surveyed by Thomson Reuters forecast earnings of $2.85 a share and $5.46 billion in sales.

The McLean, Virginia-based business also announced the surprise departure of Stu Shea, president and COO, effective as of April 6. The company said it was a mutual decision reached by Shea, CEO John Jumper and the company's board.

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The two upsets overshadowed strong fourth-quarter results. Leidos recorded net income of 56 cents a share, 11 cents higher than estimates, and revenue of $1.3 billion, $30 million more than expected.

TheStreet Ratings team rates LEIDOS HOLDINGS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate LEIDOS HOLDINGS INC (LDOS) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow."

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