What drove LDOS's earnings surprise in 2024?

Leidos Holdings (LDOS) experienced a net income surprise of $0.11 per share in 2024, which can be attributed to several key factors:

1. **Revenue Growth**: Leidos saw an increase in revenue, which was a significant driver of profitability. For instance, the company reported a 6.9% year-over-year growth in revenue for Q3 2024, reaching $4.19 billion. This consistent growth in sales contributes to higher earnings.
2. **Expense Management**: Leidos' shift to profitability was largely due to lower expenses. Effective cost management allows companies to retain more of their revenue as profit, leading to higher net income.
3. **Segment Performance**: The company's segments, such as Commercial & International, showed strong performance. This suggests that each division within Leidos contributed positively to the overall earnings, reinforcing the company's financial strength.
4. **Market Conditions**: Favorable market conditions and increased demand in certain segments, like the Airborne ISR and Hypersonics businesses, could have led to higher revenues and profitability.

In summary, Leidos' earnings surprise was likely a result of a combination of revenue growth, effective cost management, strong segment performance, and favorable market conditions.