Back to top

Analyst Blog

Shares of L-3 Communications Holdings Inc. (LLL - Analyst Report) hit a 52-week high of $120.26 and eventually closed at $120.20 at the end of trading on Apr 2. The share price has been rising ever since it reported strong fourth quarter fiscal 2013 results on Jan 30. Average volume of shares traded over the last three months came in at 829,282.

Better-Than-Expected Results

L-3 Communications reported better-than-expected fourth quarter 2013 numbers. Adjusted earnings were $2.17 per share, substantially ahead of the Zacks Consensus Estimate by 9.6%. International and commercial businesses drove the uptrend, partially offset by a weak U.S. national security business.

In fact, this Zacks Rank #2 (Buy) stock has delivered an average positive earnings surprise of 4.75% over the past 4 quarters, keeping investors’ confidence in tact. The consistently strong performance was due to L-3 Communications’ program execution capability, cost cutting initiatives and contribution from its international and commercial businesses.

Total revenue of $3.25 billion in the reported quarter beat the Zacks Consensus Estimate by 2.8%.

Apart from delivering strong top and bottom line numbers, the company is also known for its shareholder-friendly moves. In 2013, the company returned $1 billion to shareholders through stock purchases and dividend payments.

Recently, L-3 Communications Holdings increased the quarterly cash dividend by 9% from 55 cents to 60 cents per share. This further instills confidence in the stock as dividend hikes reflect a company’s sound financial position and healthy cash flows.

Additionally, management expects to make $1 billion of free cash flow and buy back $0.5 billion of shares in 2014.

Other Stock to Consider

Some other names in the aerospace and defense sector worth considering include Huntington Ingalls Industries, Inc. (HII - Snapshot Report), Wesco Aircraft Holdings, Inc. (WAIR - Snapshot Report) and Raytheon Co. (RTN - Analyst Report). While Huntington Ingalls and Wesco Aircraft carry a Zacks Rank #1 (Strong Buy), Raytheon holds a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.