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L3 Technologies, Inc. posted fourth-quarter 2017 adjusted earnings of $2.35 per share from continuing operations, surpassing the Zacks Consensus Estimate of $2.30 by 2.2%.
The company reported earnings of $3.34 which was higher than the prior-year quarter’s equivalent of $2.32 per share. The improvement was led by a tax benefit of 99 cents on account of the recent U.S. tax reforms.
L-3 Technologies, Inc. Price, Consensus and EPS Surprise
Total revenues of $2.57 billion in the quarter beat the Zacks Consensus Estimate of $2.55 billion by 1.1%. However, the top line was down 3% year over year.
Organic sales to the U.S. government inched up 0.4%, while that to international and commercial customers declined 12%. Overall, organic sales dropped 4%.
Orders & Margin
Funded orders in 2017 were $9.9 billion, reflecting a 5% rise compared to last year. Funded backlog was $9 billion as of Dec 31, 2017, up 6% from $8.4 billion as of Dec 31, 2016.
Operating margin contracted 50 basis points (bps) to 10.2% in the quarter.
Segmental Performance
Electronic Systems: Net sales at the segment declined 7% to $803 million from the prior-year figure of $861 million, mainly on account of significant organic sales decline.
Operating income was $110 million compared with the year-ago figure of $109 million, while operating margin expanded 100 bps to 13.7%.
Aerospace Systems: The segment recorded net sales of 727 million in the quarter, down annually by $1 million. The downside was attributed to lower volume for large ISR aircraft systems for foreign military customers.
While operating income increased to $58 million from $50 million, operating margin expanded 110 bps to 8%.
Communication Systems: Net sales at the segment improved about 3% to $602 million, primarily owing to increased volume and deliveries of secure networked communication systems to the U.S. Department of Defense.
While operating income dropped 16% to $47 million, operating margin contracted 180 bps to 7.8%.
Sensor Systems: Net sales at the segment declined 6% to $442 million on account of lower organic sales.
Operating income dropped 28% to $48 million and operating margin contracted 330 bps to 10.9%.
Financial Position
As of Dec 31, 2017 L3 Technologies had $662 million in cash and cash equivalents compared with $363 million as of Dec 31, 2016.
Long-term debt as of Dec 31, 2017, was $3,330 million compared with $3,325 million as of Dec 31, 2016.
Net cash from operating activities was $986 million at the end of 2017, down 3.5% from the year-ago figure. Capital expenditure totaled $224 million compared with $210 million in the prior year.
2018 Guidance
L3 Technologies raised its 2018 earnings outlook. The company now expects earnings in the range of $9.30-$9.50 per share (versus the prior range of $8.60-$8.85). Revenue guidance was reiterated at $9,850-$10,050 million.
The company also raised its expectation of cash from operations to $1,145 million from $1,110 million and resultant free cash flow to $900 million from $865 million.
General Dynamics Corporation (GD - Free Report) reported fourth-quarter 2017 earnings from continuing operations of $2.50 per share, beating the Zacks Consensus Estimate of $2.37 by 5.5%. However, its total revenues of $8,277 million missed the Zacks Consensus Estimate of $8,437 million by 1.9%.
Upcoming Peer Release
Huntington Ingalls Industries, Inc. (HII - Free Report) is expected to report fourth-quarter 2017 results on Feb 15. The company has an Earnings ESP of +3.43% and a Zacks Rank #2 (Buy).
Lockheed Martin Corp. (LMT - Free Report) is expected to report fourth-quarter 2017 results on Jan 29. The company has an Earnings ESP of +0.31% and a Zacks Rank #2.
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It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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L3 Technologies (LLL) Q4 Earnings Top, Raises '18 EPS View
L3 Technologies, Inc. posted fourth-quarter 2017 adjusted earnings of $2.35 per share from continuing operations, surpassing the Zacks Consensus Estimate of $2.30 by 2.2%.
The company reported earnings of $3.34 which was higher than the prior-year quarter’s equivalent of $2.32 per share. The improvement was led by a tax benefit of 99 cents on account of the recent U.S. tax reforms.
L-3 Technologies, Inc. Price, Consensus and EPS Surprise
L-3 Technologies, Inc. Price, Consensus and EPS Surprise | L-3 Technologies, Inc. Quote
Total Revenues
Total revenues of $2.57 billion in the quarter beat the Zacks Consensus Estimate of $2.55 billion by 1.1%. However, the top line was down 3% year over year.
Organic sales to the U.S. government inched up 0.4%, while that to international and commercial customers declined 12%. Overall, organic sales dropped 4%.
Orders & Margin
Funded orders in 2017 were $9.9 billion, reflecting a 5% rise compared to last year. Funded backlog was $9 billion as of Dec 31, 2017, up 6% from $8.4 billion as of Dec 31, 2016.
Operating margin contracted 50 basis points (bps) to 10.2% in the quarter.
Segmental Performance
Electronic Systems: Net sales at the segment declined 7% to $803 million from the prior-year figure of $861 million, mainly on account of significant organic sales decline.
Operating income was $110 million compared with the year-ago figure of $109 million, while operating margin expanded 100 bps to 13.7%.
Aerospace Systems: The segment recorded net sales of 727 million in the quarter, down annually by $1 million. The downside was attributed to lower volume for large ISR aircraft systems for foreign military customers.
While operating income increased to $58 million from $50 million, operating margin expanded 110 bps to 8%.
Communication Systems: Net sales at the segment improved about 3% to $602 million, primarily owing to increased volume and deliveries of secure networked communication systems to the U.S. Department of Defense.
While operating income dropped 16% to $47 million, operating margin contracted 180 bps to 7.8%.
Sensor Systems: Net sales at the segment declined 6% to $442 million on account of lower organic sales.
Operating income dropped 28% to $48 million and operating margin contracted 330 bps to 10.9%.
Financial Position
As of Dec 31, 2017 L3 Technologies had $662 million in cash and cash equivalents compared with $363 million as of Dec 31, 2016.
Long-term debt as of Dec 31, 2017, was $3,330 million compared with $3,325 million as of Dec 31, 2016.
Net cash from operating activities was $986 million at the end of 2017, down 3.5% from the year-ago figure. Capital expenditure totaled $224 million compared with $210 million in the prior year.
2018 Guidance
L3 Technologies raised its 2018 earnings outlook. The company now expects earnings in the range of $9.30-$9.50 per share (versus the prior range of $8.60-$8.85). Revenue guidance was reiterated at $9,850-$10,050 million.
The company also raised its expectation of cash from operations to $1,145 million from $1,110 million and resultant free cash flow to $900 million from $865 million.
Zacks Rank
L3 Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Peer Release
General Dynamics Corporation (GD - Free Report) reported fourth-quarter 2017 earnings from continuing operations of $2.50 per share, beating the Zacks Consensus Estimate of $2.37 by 5.5%. However, its total revenues of $8,277 million missed the Zacks Consensus Estimate of $8,437 million by 1.9%.
Upcoming Peer Release
Huntington Ingalls Industries, Inc. (HII - Free Report) is expected to report fourth-quarter 2017 results on Feb 15. The company has an Earnings ESP of +3.43% and a Zacks Rank #2 (Buy).
Lockheed Martin Corp. (LMT - Free Report) is expected to report fourth-quarter 2017 results on Jan 29. The company has an Earnings ESP of +0.31% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>