L-3 Communications (LLL) Misses Q1 EPS by 11c; Guides Lower

L-3 Communications (NYSE: LLL) reported Q1 EPS of $1.43, $0.11 worse than the analyst estimate of $1.54. Revenue for the quarter came in at $2.7 billion versus the consensus estimate of $2.79 billion.

L-3 Communications sees FY2015 EPS of $7.35-$7.65, versus the consensus of $7.64. L-3 Communications sees FY2015 revenue of $11.45-11.65 billion, versus prior guidance of $11.75-11.95 billion and the consensus of $11.79 billion.

“Our book-to-bill ratio continues a positive trend and gives us confidence in our full-year 2015 financial estimates,” said Michael T. Strianese, chairman, president and chief executive officer. “The fundamental growth drivers of our business remained strong during the first quarter as demonstrated by all four of our segments delivering book-to-bill ratios of greater than 1.0x. However, our results for the quarter were below our expectations and were negatively impacted by additional cost growth on international head-of-state aircraft modification contracts in the Platform Systems business of our Aerospace Systems segment. Accordingly, in order to strengthen the Platform Systems management, improve its program performance and enhance its competitiveness, we recently integrated the business into our ISR Systems sector. Additionally, we anticipate opportunities elsewhere in Aerospace Systems later this year that will improve the segment’s results. Despite these challenges, we continued to execute our strategy, capturing key new business wins during the quarter, which resulted in strong funded orders of $2.9 billion and a book-to-bill ratio of 1.06x.”

“The acquisition of Miteq and the divestiture of MSI that we expect to complete next month continue to sharpen our focus on our core businesses, improving margins and enhancing our future growth profile. We also delivered on our commitment to return value to our shareholders, repurchasing $100 million of our common stock and paying dividends of $58 million during the quarter. In addition, we increased our quarterly cash dividend by 8% to $0.65 per share, which represents our 11th consecutive annual dividend increase.”

For earnings history and earnings-related data on L-3 Communications (LLL) click here.

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