Kratos Defense (NASDAQ: KTOS) reported Q4 EPS of $0.02, $0.13 better than the analyst estimate of ($0.11). Revenue for the quarter came in at $177.5 million versus the consensus estimate of $163.75 million.

Eric DeMarco, Kratos’ President and CEO, said, “In the fourth quarter Kratos successfully completed two additional flights of our UTAP-22 low cost, high performance tactical unmanned aerial system, with all flight objectives being exceeded in the third and final flight. Accordingly, we have significantly reduced the IR&D, NRE, capital expenditures and other investments we had been making in this platform, and we are currently focused on the customer and market aspects of our tactical unmanned strategy now that we have demonstrated the capabilities of our aircraft. Additionally, in the fourth quarter Kratos completed a successful flight of our newest unmanned aerial target drone system, the BQM-177A, under the U.S. Navy SSAT program, with all key flight performance objectives being achieved. With this successful flight, we continue to expect both the SSAT and a certain confidential program to begin LRIP later on this year with initial deliveries expected to commence in 2017.”

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