Leonardo DRS, Inc. (DRS) shares tumbled 5.62% in pre-market trading on Wednesday, despite reporting second-quarter results that exceeded analysts' expectations. The defense technology company's stock reaction suggests that investors may be focusing on the company's outlook, which apparently failed to meet market expectations.
For the second quarter of 2025, Leonardo DRS reported earnings per share (EPS) of $0.20, with adjusted EPS coming in at $0.23, surpassing the IBES estimate of $0.21. The company's revenue reached $829 million, slightly above the expected $827.5 million. Adjusted EBITDA stood at $96 million, also beating the estimate of $93.8 million, with an adjusted EBITDA margin of 11.6%.
Despite these positive results, the market's negative reaction appears to stem from the company's full-year outlook. Leonardo DRS projected fiscal year 2025 revenue between $3,525 million and $3,600 million, with adjusted EBITDA ranging from $437 million to $453 million. The company also forecasted adjusted EPS for the full year to be between $1.06 and $1.11. While these figures represent growth, they may not have met the heightened expectations of investors, particularly given the company's strong performance in Q2. The sharp stock decline indicates that market participants were likely anticipating more robust guidance for the remainder of the year.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.