Leonardo DRS (NASDAQ:DRS) Posts Earnings Results, Beats Expectations By $0.05 EPS

Leonardo DRS (NASDAQ:DRS) announced its quarterly earnings data on Tuesday. The company reported $0.26 earnings per share for the quarter, topping analysts’ consensus estimates of $0.21 by $0.05, Briefing.com reports. Leonardo DRS had a net margin of 7.62% and a return on equity of 11.68%. The firm had revenue of $846.00 million during the quarter, compared to analyst estimates of $825.05 million. During the same period in the previous year, the business posted $0.20 EPS. The business’s quarterly revenue was up 5.9% on a year-over-year basis. Leonardo DRS updated its FY 2026 guidance to 1.260-1.300 EPS.

Here are the key takeaways from Leonardo DRS’s conference call:

• Company reported strong Q1 results with revenue of $846M (+6% YoY), adjusted EBITDA of $105M (+28% YoY), and adjusted EPS of $0.26, with margin expansion of ~210 bps.
• Management raised full-year 2026 guidance to $3.90B–$3.975B revenue, $515M–$530M adjusted EBITDA, and $1.26–$1.30 adjusted EPS
• Demand momentum and funded backlog reached company records (17th consecutive quarter with book-to-bill ≥1), driven by tactical radars, infrared sensing and a notable $533M DAIRCM production IDIQ, prompting capacity increases.
• Company is increasing organic investment in R&D and CapEx and launching products like THOR and Sage Core while pursuing targeted tuck-in M&A to fill technology gaps across counter‑UAS, space sensing, and naval power systems.
• Q1 had a modest free cash flow outflow due to seasonality and higher working capital to fund growth, though management expects Q2 to be modestly FCF positive and improved conversion over the year.

Leonardo DRS Trading Up 3.6%

DRS traded up $1.43 during midday trading on Wednesday, reaching $41.13. 132,956 shares of the company’s stock traded hands, compared to its average volume of 1,187,359. The firm has a fifty day moving average of $44.56 and a two-hundred day moving average of $39.75. The stock has a market capitalization of $10.94 billion, a price-to-earnings ratio of 39.89, a P/E/G ratio of 2.95 and a beta of 0.29. The company has a debt-to-equity ratio of 0.12, a current ratio of 1.89 and a quick ratio of 1.60. Leonardo DRS has a 52 week low of $32.43 and a 52 week high of $49.31.

Leonardo DRS Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, June 2nd. Shareholders of record on Tuesday, May 19th will be given a dividend of $0.09 per share. The ex-dividend date of this dividend is Tuesday, May 19th. This represents a $0.36 dividend on an annualized basis and a yield of 0.9%. Leonardo DRS’s dividend payout ratio is presently 34.95%.

Analyst Ratings Changes

DRS has been the subject of a number of recent research reports. Bank of America boosted their target price on Leonardo DRS from $50.00 to $55.00 and gave the company a “buy” rating in a research note on Wednesday, March 25th. Wall Street Zen lowered Leonardo DRS from a “buy” rating to a “hold” rating in a research note on Saturday. Morgan Stanley set a $47.00 target price on Leonardo DRS in a research note on Wednesday, February 25th. Canaccord Genuity Group set a $54.00 target price on Leonardo DRS in a research note on Wednesday. Finally, Weiss Ratings upgraded shares of Leonardo DRS from a “hold (c+)” rating to a “buy (b-)” rating in a report on Friday, March 20th. One research analyst has rated the stock with a Strong Buy rating, four have given a Buy rating and three have assigned a Hold rating to the company’s stock. According to MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $52.00.

Key Leonardo DRS News

Here are the key news stories impacting Leonardo DRS this week:

• Positive Sentiment: Q1 results beat expectations — Q1 revenue of $846M (+5.9% YoY) and EPS of $0.26 topped consensus, driven by program execution and improved margins; the market response has been positive. Business Wire Q1 Release
• Positive Sentiment: FY2026 guidance raised / affirmed — Management set revenue guidance of $3.9B–$3.975B and adjusted EPS of $1.26–$1.30 (consensus ~1.26), reflecting stronger execution and underlying demand; guidance helped lift investor sentiment. Seeking Alpha: Forecasts
• Neutral Sentiment: Dividend declared — Leonardo DRS announced a quarterly dividend of $0.09 per share (annualized yield ~0.9%), record date May 19 and payable June 2; modest income support but not the primary catalyst. Business Wire: Dividend & Results
• Neutral Sentiment: Management commentary and materials available — CEO commentary, earnings slide deck and the full earnings call transcript provide color on margin expansion, program pacing, and backlog; useful for investors doing deeper due diligence. Earnings Call Transcript
• Neutral Sentiment: Analyst / media coverage highlights beats — Zacks and other outlets summarize the beat and metrics; coverage reinforces the market move but contains no new surprises. Zacks: Q1 Beat

Insider Buying and Selling at Leonardo DRS

In other Leonardo DRS news, CFO Michael Dippold sold 16,330 shares of the company’s stock in a transaction that occurred on Monday, March 16th. The stock was sold at an average price of $45.27, for a total transaction of $739,259.10. Following the completion of the transaction, the chief financial officer owned 26,622 shares of the company’s stock, valued at $1,205,177.94. This represents a 38.02% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. Also, SVP Pamela Morrow sold 12,000 shares of the company’s stock in a transaction on Tuesday, March 3rd. The stock was sold at an average price of $45.20, for a total transaction of $542,400.00. Following the completion of the transaction, the senior vice president owned 6,494 shares of the company’s stock, valued at $293,528.80. This trade represents a 64.89% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 64,361 shares of company stock valued at $2,944,837 in the last 90 days. Insiders own 0.25% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the stock. Quarry LP raised its holdings in Leonardo DRS by 7,041.7% in the 4th quarter. Quarry LP now owns 857 shares of the company’s stock worth $29,000 after purchasing an additional 845 shares in the last quarter. PNC Financial Services Group Inc. raised its holdings in Leonardo DRS by 435.0% in the 3rd quarter. PNC Financial Services Group Inc. now owns 1,161 shares of the company’s stock worth $53,000 after purchasing an additional 944 shares in the last quarter. Kestra Advisory Services LLC bought a new position in shares of Leonardo DRS in the 4th quarter worth approximately $48,000. Osaic Holdings Inc. raised its position in shares of Leonardo DRS by 17.0% in the 2nd quarter. Osaic Holdings Inc. now owns 2,383 shares of the company’s stock worth $111,000 after acquiring an additional 347 shares in the last quarter. Finally, Cerity Partners LLC bought a new position in shares of Leonardo DRS in the 2nd quarter worth approximately $204,000. 18.76% of the stock is currently owned by institutional investors.

About Leonardo DRS

Leonardo DRS is a U.S.-based defense technology company and wholly owned subsidiary of Italy’s Leonardo S.p.A. The firm specializes in developing and integrating mission-critical systems for military and government customers, with a primary focus on command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR). Its core offerings encompass advanced sensors, targeting systems, radars and electronic warfare solutions designed to enhance situational awareness and operational effectiveness across land, sea and air domains.

The company’s portfolio includes naval combat management systems, unmanned vehicle sensors, power generation and distribution equipment, and training and simulation solutions.

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