Surveillance and aircraft modernization services provider L-3 Communications Holdings Inc. (LLL), Thursday reported a better-than-expected profit for the fourth quarter, helped by growth in all four of its reportable segments. Looking ahead, the company raised its earnings outlook for fiscal year 2010.
Net income allocable to the company's common shareholders was $225 million or $1.93 per share for the fourth quarter, compared to $261 million or $2.17 per share in the prior year quarter.
Result for the year-ago included a gain of $20 million after taxes, or $0.16 per share, related to the divestiture of an 85% owned business.
On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $1.86 per share for the fourth quarter. Analysts' estimates typically exclude special items.
As a percentage of sales, operating margin improved to 10.6% from 10.4% in the previous year quarter, due to higher margins for the C3ISR segment and certain businesses within the Electronic Systems.
Fourth quarter net sales increased 5% to a record $4.2 billion from $4.0 billion in the same quarter last year, driven by growth in all four of the company's reportable segments. Thirteen analysts had a consensus revenue estimate of $4.11 billion for the fourth quarter.
Net sales from Command, Control, Communications, Intelligence, Surveillance and Reconnaissance or C3ISR grew 17% to $870.6 million, due to increased demand and new business from the U.S. Department of Defense for airborne ISR and networked communication systems for manned and unmanned platforms.
Government Services net sales for the fourth quarter improved slightly by 0.2% to $1.1 billion over a year ago.
Aircraft Modernization and Maintenance or AM&M net sales grew 1% to $725.6 million in the fourth quarter.
Net sales from Electronic Systems rose 4% to $1.5 billion over last year, due to higher sales volume.
During the quarter, L-3 refinanced a substantial portion of its debt, reducing its debt by $400 million. The company completed a $1 billion senior notes offering, which was used to repay $650 million term loan, and to redeem $750 million 7?% senior subordinated notes.
The company also entered into a new $1 billion three-year revolving credit facility that expires on Oct. 23, 2012, replacing the existing $1 billion revolving credit facility that was scheduled to expire on March 9, 2010.
For fiscal 2009, net income allocable to the company's common shareholders was $893 million or $7.61 per share, compared to $929 million or $7.59 per share in the previous year. Annual net sales increased to $15.6 billion from $14.9 billion in the prior year.
Analysts expected the company to report earnings of $7.53 per share on revenue of $15.53 billion for the year 2009.
For fiscal year 2010, L-3 now expects earnings of $8.00 to $8.20 per share, and net sales of $15.8 billion to $16.0 billion. The Street currently estimates earnings of $8.02 per share on revenue of $15.88 billion for the year.
Earlier, the company estimated earnings of $7.85 to $8.05 per share, and net sales of $15.7 billion to $15.9 billion.
L-3 closed Thursday's regular trading session at $84.36, down $1.15 or 1.34%.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.