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Why Is FLIR Systems (FLIR) Down 2.3% Since the Last Earnings Report?

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A month has gone by since the last earnings report for FLIR Systems, Inc. (FLIR - Free Report) . Shares have lost about 2.3% in that time frame, outperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is the stock due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

FLIR Systems Beats Q2 Earnings Estimates, View Intact

FLIR Systems'  second-quarter 2017 adjusted earnings per share came in at $0.42, surpassing the Zacks Consensus Estimate by a penny. The figure rose 13.5% over the prior-year quarter number on solid top-line growth.

GAAP net earnings for the quarter came in at $51.4 million, higher than the year-ago quarter’s figure of $45.4 million.

Inside the Headlines

The company’s top line grew 7.8% year over year to $434.1 million. However, revenues missed the Zacks Consensus Estimate of $437 million. Phenomenal rise in the company’s OEM & Emerging Markets segment drove the overall top line. Also, sturdy performances of Surveillance and Instruments segments boosted the sales performance.

As for the segments, OEM & Emerging Markets revenues continued their striking growth trajectory, rising an impressive 54.0% over the prior-year quarter to $87.4 million. The segment’s revenues were partially driven by the addition of the Integrated Imaging Solutions line of business from the recent acquisition of Point Grey Research. Surveillance segment revenues also rose 14.0% year over year to $129.2 million. Revenues from the Instruments segment came in at $86.0 million, up 10% on a year-over-year basis.

The Security segment’s revenues were down 22% to $49.7 million from the prior year, mainly attributable to a decline in Lorex-branded products. Also, Detection segment revenues shrunk 25% to $26.7 million, largely attributable to unfavorable timing of DR-SKO program shipments. Maritime segment revenues were flat year over year, totaling to $55.1 million.

FLIR Systems' backlog of firm orders for delivery within the next 12 months came in at $645 million, reflecting an increase of 6% from the year-ago quarter figure .

Adjusted operating income came in at $81.0 million compared with $70.1 million in the prior-year quarter. Sturdy top-line growth drove the rise in income.

Liquidity & Cash Flow

As of Jun 30, 2017, the company's cash and cash equivalents were $403.6 million compared with $361.3 million as of Dec 31, 2016. Long-term debt fell to $491.3 million compared with $501.9 million as at Dec 31, 2016.

Cash flow generated from operating activities in the quarter came in at $51.4 million, higher than $45.4 million generated in the year-earlier quarter.

Dividend & Share Repurchase

Concurrent with the earnings report, FLIR Systems announced a quarterly cash dividend of $0.15 per share, payable on Sep 8, 2017, to shareholders of record as of Aug 25.

Guidance

FLIR Systems reiterated its outlook for 2017 and continues to expect adjusted earnings to lie in the range of $1.81–$1.91 per share, on revenues of $1.78–$1.83 billion. The figures represent year-over-year growth of about 7–13% in adjusted earnings and 7–10% growth in revenues.

In fact, the company expects to see an uptick in organic growth second quarter onwards.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the past month as none of them issued any earnings estimate revisions.

FLIR Systems, Inc. Price and Consensus

 

FLIR Systems, Inc. Price and Consensus | FLIR Systems, Inc. Quote

VGM Scores

At this time, FLIR Systems' stock has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall,the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is  suitable for momentum and growth investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.




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