L-3 Communication Earnings: Four Straight Quarters of Profit Drops

S&P 500 (NYSE:SPY) component L-3 Communication Holdings Inc. (NYSE:LLL) reported its results for the third quarter. L-3 Communications is a system contractor in aircraft modernization and maintenance, serving customers in commercial telecommunications and government.

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L three Communication Holdings Inc. Earnings Cheat Sheet

Results: Net income for L-3 Communication Holdings Inc. fell to $192 million ($1.97 per share) vs. $235 million ($2.24 per share) a year earlier. This is a decline of 18.3% from the year-earlier quarter.

Revenue: Fell 0.5% to $3.28 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: L-3 Communication Holdings Inc. reported adjusted net income of $1.98 per share. By that measure, the company beat the mean estimate of $1.86 per share. It fell short of the average revenue estimate of $3.56 billion.

Quoting Management: “Overall, we had a solid third quarter and performed well in our core areas and we continued to make progress in our international and commercial businesses. In spite of the challenges and uncertainty in the U.S. defense budget, sales grew in our Electronic Systems, C3ISR and AM&M segments, which demonstrates that L-3 is well-positioned and executing on its strategy to grow market share and be adaptable and agile in the markets we serve,” said Michael T. Strianese, chairman, president and chief executive officer. “Orders for the quarter were $3.2 billion, resulting in a book-to-bill ratio of 0.99x. We ended the quarter with funded backlog of $11.0 billion, up 11% compared to December 2011.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 20 cents in the second quarter, by 13 cents in the first quarter, and by 13 cents in the fourth quarter of the last fiscal year.

The company has now seen net income fall in each of the last three quarters. In the second quarter, net income fell 15.6% from the year earlier, while the figure fell 1.5% in the first quarter.

Looking Forward: Expectations for the company’s next-quarter results are lower than they have been. Over the past sixty days, the average estimate for fourth quarter has fallen from $2.21 per share to $2.20. The average estimate for the fiscal year is $7.84 per share, down from $7.87 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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