L-3 Communications Corporation, a subsidiary of
L-3 Communications Holdings Inc.
), announced that it has priced $1.0 billion in aggregate principal
amount of senior notes. The company intends to close the offering
on May 28, 2014.
In the latest release, these bonds have been issued in two
tranches. While one part comprises $350 million, 3-year senior
notes bearing interest at a fixed rate of 1.50% per year and
maturing on May 28, 2017, the second part constitutes of $650
million, 10-year senior notes bearing interest at a fixed rate of
3.95% per year and maturing on May 28, 2024.
The company intends to utilize a portion of the net proceeds to
fund purchases and for the redemption of its 3.00% Convertible
Contingent Debt Securities due Aug 1, 2035. The remaining net
proceeds will be used for general corporate purposes.
Long-term debt as of Mar 28, 2014 was $3,631 million, almost flat
from the end 2013 level. Interest expense stood at $43 million in
the first quarter, flat year over year. In the first quarter 2014,
L-3 Communications had $227.0 million in cash and cash equivalents
versus $500 million as of Dec 31, 2013. During the first quarter
2014 net cash used in operating activities was $62 million compared
to net cash of $146 million generated from operating activities in
the year-ago period.
The company surpassed the Zacks Consensus Estimate for both
earnings and revenues by 2.6% and 0.2% respectively in the first
quarter of 2014. The strong performance was driven by its program
execution capability, cost cutting initiatives and contribution
from its international and commercial businesses.
For 2014, the company expects earnings in the range of $8.20 to
$$8.40 per share. The Zacks Consensus Estimate of $8.37 per share
for 2014 reflects an estimated year-over-year growth of 3.77%.
Currently, L-3 Communications Holdings holds a Zacks Rank #3
(Hold). However, other well-ranked defense players include
The Boeing Co.
Alliant Techsystems Inc.
). All of these stocks hold a Zacks Rank #2 (Buy).
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