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Why Is FLIR Systems (FLIR) Up 3.8% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for FLIR Systems, Inc. (FLIR - Free Report) . Shares have added about 3.8% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is FLIR due for a pullback? 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 Q1 Earnings & Revenues Surpass Estimates

FLIR Systems’ first-quarter 2018 adjusted earnings per share came in at 48 cents, surpassing the Zacks Consensus Estimate of 43 cents. The reported figure also increased 33.3% from the prior-year quarter figure owing to solid top-line growth.

Adjusted net income came in at $68.2 million compared with $49.6 million in the year-ago quarter. The year-over-year improvement can primarily be attributed to the company’s solid top-line performance.

Inside the Headlines

FLIR Systems’ revenues grew 8.1% year over year to $439.6 million. The top line also outpaced the Zacks Consensus Estimate of $397.5 million. Strong growth across the company’s two of the three segments drove the overall top line.

Segment-wise, revenues at the Industrial segment increased 10.3% year over year to $170.7 million. The improvement was driven by higher handheld thermal imager and camera core sales. At the Government and Defense segment revenues came in at $159.3 million, up 15.3% on a year-over-year basis. The uptick can be attributed to international deliveries. However, the Commercial segments’ revenues declined 3.7% to $109.6 million from the year-ago quarter.

Adjusted operating income came in at $87.8 million compared with $69.6 million in the prior-year quarter. Healthy top-line improvement led to the rise in income.

Liquidity & Cash Flow

As of Mar 31, 2018, the company's cash and cash equivalents were $452.1 million compared with $519.1 million as of Dec 31, 2017. Long-term debt was $421 million, marginally up from $420.7 million at Dec 31, 2017.

Cash flow generated from operating activities in the quarter came in at $43.2 million, down from $75.1 million in the prior-year quarter.

Outlook

Concurrent with the first-quarter earnings release, FLIR Systems revised its guidance for 2018. The company now projects adjusted earnings per share in the range of $2.11-$2.16 compared with its prior guidance of $2.05-$2.10. In addition, it expects revenues in the range of $1.76-$1.79 billion compared with $1.73-$1.76 billion projected earlier.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.

FLIR Systems, Inc. Price and Consensus

VGM Scores

At this time, FLIR has a nice Growth Score of B, though it is lagging a bit on the momentum front with a C. Charting a somewhat similar path, 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 C. 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 more suitable for growth investors than momentum investors.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. Notably, FLIR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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