L-3 Communications Holdings Inc. (LLL) reported a
better-than-expected 19% rise in third-quarter earnings. That led
the defense contractor to again raise its full-year earnings
guidance.
The company, which has contracts for such services as training
foreign militaries and upgrading government aircraft, now expects
2009 earnings of $7.45 to $7.50, up as much as 20 cents from its
July view. It lowered the top end of its expected revenue range by
$100 million.
L-3 also predicted 2010 earnings of $7.85 to $8.05 on revenue
between $15.7 billion and $15.9 billion. The mean estimates of
analysts surveyed by Thomson Reuters were $7.92 and $16.1 billion,
respectively.
Chairman and Chief Executive Michael Strianese said the most
recent period was a good one, led by strength in the company's
segment providing command, control, communications, intelligence,
surveillance and reconnaissance services. "Looking ahead, we are
well positioned for shifting customer priorities and slowing U.S.
Department of Defense budgets," he added.
L-3, which differs from larger rivals who rely on a few major
contracts for the bulk of revenue, has said the diversity of its
operations will see them through the changes in U.S. defense
spending. The Pentagon is cutting back on expensive weapons
programs meant for traditional battle and increasing money for
lower-tech programs to counter insurgencies in Iraq and
Afghanistan. The company also has reduced its debt and pushed back
maturities, a key factor in both Moody's Investors Service and
Fitch Ratings upgrading the company, the latter moving it to
investment-grade status.
L-3 posted a profit of $250 million, or $2.12 a share, up from
$210 million, or $1.70 per share a year earlier. The latest results
included a tax benefit of 22 cents. Revenue increased 4.9% to $3.84
billion.
In July, the company predicted earnings of $1.85, slightly above
analysts' expectations at the time, on revenue between $3.8 billion
and $3.9 billion.
Funded orders fell 15% from the year-earlier period to $3.4
billion. Funded backlog decreased 6% to $10.8 billion.
L-3 shares closed Monday at $74.16 and weren't active premarket.
The stock, which hit a four-year low in March, is roughly flat for
the year.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com