L-3 Communications Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component L-3 Communications (NYSE:LLL) will unveil its latest earnings tomorrow, Wednesday, January 30, 2013. L-3 Communications is a system contractor in aircraft modernization and maintenance, serving customers in commercial telecommunications and government.

L-3 Communications Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $2.12 per share, a decline of 16.5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $2.20. Between one and three months ago, the average estimate moved down. It has been unchanged at $2.12 during the last month. For the year, analysts are projecting net income of $7.89 per share, a decline of 10.8% from last year.

Past Earnings Performance: Last quarter, the company beat estimates by 6 cents, coming in at profit of $1.92 a share versus the estimate of net income of $1.86 a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the third quarter, profit fell 18.3% to $192 million ($1.97 a share) from $235 million ($2.24 a share) the year earlier, but exceeded analyst expectations. Revenue fell 13.3% to $3.28 billion from $3.79 billion.

Here’s how L-3 Communications traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:


Wall St. Revenue Expectations: Analysts are projecting a decline of 13.9% in revenue from the year-earlier quarter to $3.46 billion.

Analyst Ratings: There are mostly holds on the stock with 10 of 12 analysts surveyed giving that rating.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 5.6% in the fourth quarter of the last fiscal year, 0.4% in first quarter and 5.5% in the second quarter and then fell again in the third quarter.

After experiencing income drops the past three quarters, the company is hoping to use this earnings announcement to rebound. Net income fell 1.5% in the first quarter, by 15.6% in the second quarter and again in the third quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.93 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

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