While sales from its various security detection products have been sluggish of late, Leidos [LDOS] expects shipments to ramp up in the second half of 2015 and believes further opportunities for growth remain, according to the company’s top executive.
Sales related to security products were low in the second quarter, contributing to a slight top line decline in Leidos’ Health and Engineering segment. But the company sees security shipments picking up late in the third quarter and into the fourth, Roger Krone, chairman and CEO of Leidos, says on the company’s second quarter earnings call.
Those shipments should help the company’s top line in the second half of the year, Leidos officials say.
The risk to deliveries isn’t that the amounts will change but that there might be issues with “documentation and customs and acceptances,” Krone says. This is an issue of “timing from quarter to quarter,” he adds.
With deliveries set to expand this year, Leidos doesn’t necessarily see a drop off heading into 2016.
“I don’t think we’re setting ourselves up for a [tough comparison],” Krone says. “I mean, we’re seeing a lot of interest not just from customers in the Middle East, but customers in the Western Hemisphere as well as South America and markets where security is an increasing concern. We think about border security for the continental United States. And markets like that as being areas where that business could grow.”
Krone mentioned orders for the company’s VACIS gamma-ray imaging systems, which are used for screening containers, other large conveyances and vehicles, during the call but the company sells a wide range of security detection products, including explosives detection systems to screen checked bags at airports, radiation portal monitors and handheld radiation identification devices, and portable X-Ray imagers.