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L3 Technologies (LLL) Beats on Q2 Earnings, Hikes '18 View
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L3 Technologies, Inc. reported second-quarter 2018 adjusted earnings of $2.47 per share from continuing operations, which surpassed the Zacks Consensus Estimate of $2.30 by 7.4%.
Excluding one-time items, the company reported GAAP earnings of $2.33, down 3% from the year-ago quarter’s figure of $2.39.
Total Revenues
In the quarter under review, total revenues came in at $2.58 billion, outpacing the Zacks Consensus Estimate of $2.48 billion by 4.1%. The top line also improved 8.3% year over year.
Organic sales to the U.S. government rose 10%, while that to international and commercial customers improved 3%. Overall, organic sales were up 4%.
L3 Technologies Inc. Price, Consensus and EPS Surprise
Funded orders in second-quarter totaled $2.8 billion, reflecting a 32% rise compared with last year’s number. Funded backlog was $8.8 billion as of Jun 29, 2018, up 4% from $8.5 billion as of Jan 1, 2018.
Operating margin expanded 10 basis points (bps) to 12.4% in the reported quarter.
Segmental Performance
Electronic Systems: Net sales at the segment improved 6% to $812 million from the prior-year figure of $767 million driven by significant organic sales growth.
Operating income summed $113 million compared with the year-ago figure of $103 million. Also, operating margin expanded 50 bps to 13.9%.
Aerospace Systems: The segment recorded net sales of $741 million in the second quarter, up annually by 9%. The upside can be attributed to procurement of one U.S. Air Force (USAF) Compass Call Recap aircraft to begin missionization.
While operating income increased to $61 million from $56 million, operating margin remained flat at 8.3%.
Communication Systems: Net sales at the segment rose 1% to $554 million, courtesy of higher volume on power devices for commercial and military satellites.
While operating income decreased 46% to $45 million, operating margin contracted 720 bps to 8.1%.
Sensor Systems: Net sales at the segment improved 22% to $476 million driven by higher organic sales.
Operating income improved 6% $54 million, while operating margin contracted 180 bps to 11.3%.
Financial Position
As of Jun 29, 2018, L3 Technologies had $1,366 million in cash and cash equivalents compared with $662 million as of Dec 31, 2017.
Long-term debt as of Jun 29, 2018, was $3,319 million compared with $3,330 million as of Dec 31, 2017.
Net cash flow from operating activities amounted to $178 million at the end of second-quarter 2018 compared with the year-ago quarter’s cash inflow of $315 million. Capital expenditures totaled $255 million which came in line with the year-ago quarter’s level.
2018 View
L3 Technologies raised its 2018 guidance. The company now expects adjusted earnings to be in the range of $9.80-$10.00 per share compared with $9.40-$9.60 guided earlier. Moreover, revenues are anticipated to be in the band of $10,000-$10,200 million compared with $9,850-$10,050 million projected previously.
Additionally, it raised the company’s expectation of 2018 cash from operations to $1,155 million from $1,170 million, while expectation for free cash flow was upped to $915 million from $900 million.
Boeing (BA - Free Report) reported adjusted earnings of $3.33 per share in second-quarter 2018, beating the Zacks Consensus Estimate of $3.24 by 2.8%.
Lockheed Martin’s (LMT - Free Report) second-quarter 2018 adjusted earnings came in at $4.31 per share, outpacing the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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L3 Technologies (LLL) Beats on Q2 Earnings, Hikes '18 View
L3 Technologies, Inc. reported second-quarter 2018 adjusted earnings of $2.47 per share from continuing operations, which surpassed the Zacks Consensus Estimate of $2.30 by 7.4%.
Excluding one-time items, the company reported GAAP earnings of $2.33, down 3% from the year-ago quarter’s figure of $2.39.
Total Revenues
In the quarter under review, total revenues came in at $2.58 billion, outpacing the Zacks Consensus Estimate of $2.48 billion by 4.1%. The top line also improved 8.3% year over year.
Organic sales to the U.S. government rose 10%, while that to international and commercial customers improved 3%. Overall, organic sales were up 4%.
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 second-quarter totaled $2.8 billion, reflecting a 32% rise compared with last year’s number. Funded backlog was $8.8 billion as of Jun 29, 2018, up 4% from $8.5 billion as of Jan 1, 2018.
Operating margin expanded 10 basis points (bps) to 12.4% in the reported quarter.
Segmental Performance
Electronic Systems: Net sales at the segment improved 6% to $812 million from the prior-year figure of $767 million driven by significant organic sales growth.
Operating income summed $113 million compared with the year-ago figure of $103 million. Also, operating margin expanded 50 bps to 13.9%.
Aerospace Systems: The segment recorded net sales of $741 million in the second quarter, up annually by 9%. The upside can be attributed to procurement of one U.S. Air Force (USAF) Compass Call Recap aircraft to begin missionization.
While operating income increased to $61 million from $56 million, operating margin remained flat at 8.3%.
Communication Systems: Net sales at the segment rose 1% to $554 million, courtesy of higher volume on power devices for commercial and military satellites.
While operating income decreased 46% to $45 million, operating margin contracted 720 bps to 8.1%.
Sensor Systems: Net sales at the segment improved 22% to $476 million driven by higher organic sales.
Operating income improved 6% $54 million, while operating margin contracted 180 bps to 11.3%.
Financial Position
As of Jun 29, 2018, L3 Technologies had $1,366 million in cash and cash equivalents compared with $662 million as of Dec 31, 2017.
Long-term debt as of Jun 29, 2018, was $3,319 million compared with $3,330 million as of Dec 31, 2017.
Net cash flow from operating activities amounted to $178 million at the end of second-quarter 2018 compared with the year-ago quarter’s cash inflow of $315 million. Capital expenditures totaled $255 million which came in line with the year-ago quarter’s level.
2018 View
L3 Technologies raised its 2018 guidance. The company now expects adjusted earnings to be in the range of $9.80-$10.00 per share compared with $9.40-$9.60 guided earlier. Moreover, revenues are anticipated to be in the band of $10,000-$10,200 million compared with $9,850-$10,050 million projected previously.
Additionally, it raised the company’s expectation of 2018 cash from operations to $1,155 million from $1,170 million, while expectation for free cash flow was upped to $915 million from $900 million.
Zacks Rank
L3 Technologies currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Boeing (BA - Free Report) reported adjusted earnings of $3.33 per share in second-quarter 2018, beating the Zacks Consensus Estimate of $3.24 by 2.8%.
Lockheed Martin’s (LMT - Free Report) second-quarter 2018 adjusted earnings came in at $4.31 per share, outpacing the Zacks Consensus Estimate of $3.89 by 10.8%.
Textron (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>