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L3 Technologies, Inc. posted first-quarter 2018 earnings of $2.34 per share from continuing operations, surpassing the Zacks Consensus Estimate of $1.99 by 2.2%. The reported figure came in 21% higher than the year-ago quarter’s tally of $1.93. The year-over-year improvement was driven by a decent increase in revenues and operating income.
Total Revenues
In the quarter under review, total revenues came in at $2.37 billion outpacing the Zacks Consensus Estimate of $2.33 billion by 1.7%. The top line also improved 2% year over year.
Organic sales to the U.S. government inched up 1%, while that to international and commercial customers improved 3%. Overall, organic sales were up 2%.
L3 Technologies Inc. Price, Consensus and EPS Surprise
Funded orders in first-quarter were $2.6 billion, reflecting a 10% rise compared with last year. Funded backlog was $8.8 billion as of Mar 30, 2018, up 3% from $8.5 billion as of Dec 31, 2017.
Operating margin contracted 40 basis points (bps) to 10.6% in the reported quarter.
Segmental Performance
Electronic Systems: Net sales at the segment improved 6% to $785 million from the prior-year figure of $738 million driven by significant organic sales growth.
Operating income was $108 million compared with the year-ago figure of $90 million, while operating margin expanded 160 bps to 13.8%.
Aerospace Systems: The segment recorded net sales of $686 million in the quarter, down annually by 1%. The downside can be attributed to lower volume for international aircraft modifications and lower volume of Intelligence, Surveillance and Reconnaissance (ISR) aircraft systems for foreign military customers.
While operating income increased to $57 million from $56 million, operating margin expanded 30 bps to 8.3%.
Communication Systems: Net sales at the segment declined 8% to $493 million due to lower production volume for Unmanned Aerial Vehicle (UAV) communication systems for the Department of Defense.
While operating income decreased 12% to $37 million, operating margin contracted 30 bps to 7.5%.
Sensor Systems: Net sales at the segment improved 16% to $407 million driven by higher organic sales.
Operating income remained flat at $48 million, while operating margin contracted 200 bps to 12%.
Financial Position
As of Mar 30, 2018, L3 Technologies had $374 million in cash and cash equivalents compared with $662 million as of Dec 31, 2017.
Long-term debt as of Mar 30, 2018, was $3,331 million compared with $3,330 million as of Dec 31, 2017.
Net cash outflow from operating activities was $35 million at the end of first-quarter 2018 compared with the year-ago quarter’s cash inflow of $86 million. Capital expenditures totaled $56 million compared with $41million in the year-ago quarter.
2018 View
L3 Technologies raised its 2018 earningsguidance. The company now expects earnings in the range of $9.40-$9.60 per share compared with $9.30-$9.50 guided earlier. However, revenue guidance was reiterated at $9,850-$10,050 million.
The company also raised its expectation of cash from operations to $1,155 million from $1,145 million, while expectation for free cash flow remained at $900 million for 2018.
Embraer SA (ERJ - Free Report) incurred a loss of 13 cents per share in first-quarter 2018 results, wider than the Zacks Consensus Estimate of a loss of a penny.
The Boeing Company (BA - Free Report) reported adjusted earnings of $3.64 per share in first-quarter 2018, beating the Zacks Consensus Estimate of $2.59 by 40.5%.
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2018 earnings from continuing operations of $4.02 per share, which surpassed the Zacks Consensus Estimate of $3.35 by 20%.
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L3 Technologies (LLL) Beats on Q1 Earnings, Ups '18 EPS View
L3 Technologies, Inc. posted first-quarter 2018 earnings of $2.34 per share from continuing operations, surpassing the Zacks Consensus Estimate of $1.99 by 2.2%. The reported figure came in 21% higher than the year-ago quarter’s tally of $1.93. The year-over-year improvement was driven by a decent increase in revenues and operating income.
Total Revenues
In the quarter under review, total revenues came in at $2.37 billion outpacing the Zacks Consensus Estimate of $2.33 billion by 1.7%. The top line also improved 2% year over year.
Organic sales to the U.S. government inched up 1%, while that to international and commercial customers improved 3%. Overall, organic sales were up 2%.
L3 Technologies Inc. Price, Consensus and EPS Surprise
L3 Technologies Inc. Price, Consensus and EPS Surprise | L3 Technologies Inc. Quote
Orders & Margin
Funded orders in first-quarter were $2.6 billion, reflecting a 10% rise compared with last year. Funded backlog was $8.8 billion as of Mar 30, 2018, up 3% from $8.5 billion as of Dec 31, 2017.
Operating margin contracted 40 basis points (bps) to 10.6% in the reported quarter.
Segmental Performance
Electronic Systems: Net sales at the segment improved 6% to $785 million from the prior-year figure of $738 million driven by significant organic sales growth.
Operating income was $108 million compared with the year-ago figure of $90 million, while operating margin expanded 160 bps to 13.8%.
Aerospace Systems: The segment recorded net sales of $686 million in the quarter, down annually by 1%. The downside can be attributed to lower volume for international aircraft modifications and lower volume of Intelligence, Surveillance and Reconnaissance (ISR) aircraft systems for foreign military customers.
While operating income increased to $57 million from $56 million, operating margin expanded 30 bps to 8.3%.
Communication Systems: Net sales at the segment declined 8% to $493 million due to lower production volume for Unmanned Aerial Vehicle (UAV) communication systems for the Department of Defense.
While operating income decreased 12% to $37 million, operating margin contracted 30 bps to 7.5%.
Sensor Systems: Net sales at the segment improved 16% to $407 million driven by higher organic sales.
Operating income remained flat at $48 million, while operating margin contracted 200 bps to 12%.
Financial Position
As of Mar 30, 2018, L3 Technologies had $374 million in cash and cash equivalents compared with $662 million as of Dec 31, 2017.
Long-term debt as of Mar 30, 2018, was $3,331 million compared with $3,330 million as of Dec 31, 2017.
Net cash outflow from operating activities was $35 million at the end of first-quarter 2018 compared with the year-ago quarter’s cash inflow of $86 million. Capital expenditures totaled $56 million compared with $41million in the year-ago quarter.
2018 View
L3 Technologies raised its 2018 earnings guidance. The company now expects earnings in the range of $9.40-$9.60 per share compared with $9.30-$9.50 guided earlier. However, revenue guidance was reiterated at $9,850-$10,050 million.
The company also raised its expectation of cash from operations to $1,155 million from $1,145 million, while expectation for free cash flow remained at $900 million for 2018.
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 Releases
Embraer SA (ERJ - Free Report) incurred a loss of 13 cents per share in first-quarter 2018 results, wider than the Zacks Consensus Estimate of a loss of a penny.
The Boeing Company (BA - Free Report) reported adjusted earnings of $3.64 per share in first-quarter 2018, beating the Zacks Consensus Estimate of $2.59 by 40.5%.
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2018 earnings from continuing operations of $4.02 per share, which surpassed the Zacks Consensus Estimate of $3.35 by 20%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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