DOW JONES NEWSWIRES
L-3 Communications Holdings Inc.'s (LLL) second-quarter profit
rose 1.3% as revenue increased less than the company expected.
L-3 also lowered its 2010 earnings forecast by 8 cents to $8.05
to $8.25 a share, after raising the view in April. The company also
cut its revenue target by $100 million, to a range of $16 billion
to $16.1 billion.
The contractor of services such as training foreign militaries
and upgrading government aircraft differs from larger rivals who
rely on a few major contracts for a bulk of revenue. Executives
have said that diversity will help it as U.S. defense spending
growth slows. Moody's Investors Service upgraded L-3 to investment
grade in May, citing debt reduction and sustained operating
performance.
L-3 posted a profit of $227 million, or $1.95 a share, up from
$223 million, or $1.90 a share, a year earlier. Excluding a
debt-retirement charge and incremental interest expense, earnings
were $2.04 in the latest quarter, and revenue rose 1% to $3.97
billion.
In April the company forecast earnings of $1.90 on $4 billion in
revenue, trailing analysts' then-estimates.
Operating margin was unchanged at 10.6%.
Funded orders rose 22% to $4.1 billion as funded backlog ended
the period at $11.1 billion, up 1.8% during the quarter.
The electronic systems segment, typically L-3's largest by
revenue, saw sales drop 2.4%, though profit increased on margin
growth. Government services sales declined 4.4% as the segment's
earnings dropped 16%.
Shares closed Monday at $76.65 and were inactive premarket.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com