L-3 Communications (LLL) posted a relatively strong quarter, with EPS coming in at $1.54 vs. the Street’s $1.51 on revenues of $3.5 billion. Improved margins on C3ISR drove strong bottom line performance and management raised guidance.
CSFB is raising its estimates and target price.
- FY08 forecast up $0.08 to $6.82, FY09 up $0.06 to $7.69. Target price to $119 from $117.
Orders grew ~7% seq. to $4.08B & book/bill was strong at 1.2x. As expected, LLL raised guidance, by $0.08, to $6.56-6.70 due to the Linguist contract extension/sub-contract role, & the purchase of the EOS business.
Mgmt. gave some nice colour on the fixed-price JCA program, which the market is watching closely for performance issues due to its size and contract type. The first two deliveries are scheduled for late this year, though LLL invested in a green plane that is essentially being used as a risk mitigation bird to work the mods. The green plane is already being worked on in Greenville, TX and the first two production planes are on the line in Italy being readied for delivery to LLL in the summer.
We are above LLL guidance on rev’s ($14.5-14.7B), but are not factoring in any divestitures. We will adjust our model when the divestitures are announced. We note nice margin progression & the potential for more, especially as LLL integrates the new EOS unit.
Business Insider Emails & Alerts
Site highlights each day to your inbox.