FLIR Systems Inc.
) reported first-quarter 2014 adjusted earnings (excluding
one-time items) of 25 cents, missing the Zacks Consensus Estimate
by a penny.
The company reported GAAP earnings of 21 cents, which fell
significantly short of last year's earnings of 35 cents.
The quarterly results were primarily impacted by the sluggish
Government-funded business. Results were also impacted by the
short-run effects of the ongoing restructuring activities. This
restructuring plan is strategic for the company as it likely to
strengthen company-wide communication, collaboration and
co-operation, while creating a logical structure that will
further leverage its vertical integration and focus on core
Total revenue was $351.5 million in the reported quarter, up
1% year over year. The increase was primarily driven by higher
sales in the commercial business, slightly offset by decline in
the government-funded businesses. Revenues surpassed the Zacks
Consensus Estimate of $350 million.
FLIR's backlog was about $514 million as of Mar 31, 2014,
marking an increase of $24 million during the quarter.
The company has modified its reporting segments to reflect the
changing dynamics of the market and to better align its business
with its customer base. This quarter onwards, the company is
reporting results in 6 segments that include:
segment includes the company's Surveillance business and also the
Integrated System segment. The revenues from the segment declined
marginally to $117.2 million from $118.0 million in the
segment comprises of the Thermography and Test and Measurement
business, which finds use in commercial and industrial markets.
The segment revenuescame in at $84.0 million, an increase from
$78.5 million in the first quarter 2013.
Original Equipment Manufacturer (OEM) and Emerging
segment includes OEM Personal Vision Systems, mobile accessories
and intelligent traffic solutions lines of business. Revenues
increased to $53.8 million from $50.3 million in the prior-year
segment, encompassing Raymarine and FLIR-branded maritime thermal
imaging products, reported revenues of $52.6 million, an increase
from $50.5 million in first-quarter 2013.
segment includes the Lorex consumer security cameras and the
FLIR-branded professional thermal and visible security products.
The segment'srevenues declined marginally to $29.3 million from
$29.5 million in the prior-year quarter.
segment consists of the company's Detection business as well as
detection-oriented programs of the Integrated Systems business.
The reported revenues of $14.6 million declined from $21.8
million in the prior-year quarter.
Income and Expenses
Operating income in the reported quarter was $42.5 million
compared with $69.1 million in the prior-year quarter. Selling
and general expenses increased to $81.9 million from last year's
figure of $78.2 million. Research and development expenses
declined nearly 1% to $36.3 million year over year.
Balance Sheet & Cash Flow
Exiting the quarter, the company's cash and cash equivalents
improved significantly to $584.1 million from $542.5 million at
the 2013 end. Long-term debt was $368.9 million, compared with
$372.5 million at the end of 2013.
Cash flow from operations declined to $59.8 million from
nearly $62 million in the comparable year-ago quarter.
In the quarter, the board of directors declared a quarterly
cash dividend of 10 cents per share. The new dividend will be
paid on Jun 6, 2014, to shareholders of record as of close of
business on May 20, 2014.
FLIR Systems is positive about the long-term benefits of its
restructuring activities. Also, it plans to boost its business by
increasing investments in marketing of its products. The company
is also positive about the scope of its upcoming Lepton micro
thermal camera core-enabled products that are also lower in
Along with the earnings release, management reaffirmed its
guidance for 2014. FLIR expects revenues in 2014 to be in the
range of $1.45 billion to $1.55 billion and earnings (excluding
restructuring charges associated with the business realignment)
to be in the range of $1.40-$1.50 per share.
FLIR Systems currently carries a Zacks Rank #4 (Sell). Some
better-ranked companies in the industry that are worth a look
Alliant Techsystems Inc.
L-3 Communications Holdings Inc.
). All three carry a Zacks Rank #2 (Buy).
ALLIANT TECHSYS (ATK): Free Stock Analysis
FLIR SYSTEMS (FLIR): Free Stock Analysis
HEXCEL CORP (HXL): Free Stock Analysis Report
L-3 COMM HLDGS (LLL): Free Stock Analysis
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