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L3 Communications Holdings Inc. Reports Operating Results (10-Q)

November 02, 2010 | About:

10qk

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L3 Communications Holdings Inc. (LLL) filed Quarterly Report for the period ended 2010-09-24.

L3 Communications Holdings Inc. has a market cap of $8.24 billion; its shares were traded at around $72.69 with a P/E ratio of 9.3 and P/S ratio of 0.5. The dividend yield of L3 Communications Holdings Inc. stocks is 2.3%. L3 Communications Holdings Inc. had an annual average earning growth of 19.2% over the past 10 years. GuruFocus rated L3 Communications Holdings Inc. the business predictability rank of 5-star.LLL is in the portfolios of Richard Pzena of Pzena Investment Management LLC, James Barrow of Barrow, Hanley, Mewhinney & Strauss, Paul Tudor Jones of The Tudor Group, Pioneer Investments, David Dreman of Dreman Value Management, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors, George Soros of Soros Fund Management LLC, Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors.
This is the annual revenues and earnings per share of LLL over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of LLL.


Highlight of Business Operations:

Sales Growth. Sales growth for the year ended December 31, 2009 was 5%, comprised of organic sales growth of 4%, and sales growth from business acquisitions, net of divestitures, of 1%. For the quarter ended September 24, 2010 (2010 Third Quarter), consolidated net sales of $3,835 million declined by 0.2%, comprised of an organic sales decline of 1.8%, partially offset by sales growth from acquisitions of $60 million or 1.6%, compared to the quarter ended September 25, 2009 (2009 Third Quarter). For the year-to-date period ended September 24, 2010 (2010 Year-to-Date Period), consolidated net sales of $11,425 million increased by 0.2%, comprised of sales growth from acquisitions of $127 million or 1.1%, partially offset by an organic sales decline of 0.9%, compared to the year-to-date period ended September 25, 2009 (2009 Year-to-Date Period).

Debt Issuance and Repayments. On May 21, 2010, L-3 Communications issued $800 million in principal amount of 4.75% Senior Notes that mature on July 15, 2020 (2020 Senior Notes) at a discount of $3 million. The net cash proceeds from this offering, together with cash on hand, were used to redeem L-3 Communications’ $800 million in aggregate 61/8% Senior Subordinated Notes due 2014 and 2013 (collectively, the Subordinated Notes). In connection with the redemption of the Subordinated Notes, we recorded debt retirement charges of approximately $13 million ($8 million after income tax, or $0.07 per diluted share) during the 2010 second quarter and $5 million ($3 million after income tax, or $0.03 per diluted share) during the 2010 Third Quarter. See “Liquidity and Capital Resources — Debt” on page 37 for a further discussion.

Net Sales: For the 2010 Third Quarter, consolidated net sales decreased 0.2% compared to the 2009 Third Quarter. Sales growth primarily from the C3ISR reportable segment was offset by lower sales from the AM&M and Electronic Systems reportable segments. Net sales from acquired businesses were $60 million in the 2010 Third Quarter. Sales from services, which include services performed by businesses primarily in our Government Services, AM&M and C3ISR reportable segments, as well as marine services, simulation & training, and maintenance for security and detection systems within our Electronic Systems reportable segment, increased by $34 million to $2,066 million, representing approximately 54% of consolidated net sales for the 2010 Third Quarter, compared to $2,032 million, or approximately 53% of consolidated net sales for the 2009 Third Quarter. Service sales increased due primarily to organic sales growth in airborne ISR logistics support services for the U.S. Air Force, logistics, training, and law enforcement support services for the U.S. Army, information technology (IT) support services for the U.S. Special Operations Command (SOCOM) and other U.S. Government agencies, and systems field support services for U.S. Army rotary wing training aircraft. These increases were partially offset by reduced subcontractor pass-through sales for U.S. Army systems and software

For the 2010 Year-to-Date Period, consolidated net sales increased 0.2% compared to the 2009 Year-to-Date Period. Sales growth from the C3ISR and AM&M reportable segments was offset by lower sales from the Government Services and Electronic Systems reportable segments. Net sales from acquired businesses were $127 million in the 2010 Year-to-Date Period. Sales from services increased by $70 million to $6,021 million, representing approximately 53% of consolidated net sales for the 2010 Year-to-Date Period, compared to $5,951 million, or approximately 52% of consolidated net sales for the 2009 Year-to-Date Period. Service sales increased primarily due to organic sales growth in airborne ISR logistic support services for the U.S. Air Force, logistics, training and law enforcement support services for the U.S. Army, systems field support services for U.S. Army rotary wing training aircraft, and IT support services for SOCOM and other U.S. Government agencies. These increases were partially offset by reduced subcontractor pass-through sales for U.S. Army SSES services, a decrease for Iraq support, lower volume for CFS and the SOFSA contract, and lower systems field support services for U.S. Air Force fixed wing training aircraft. Sales from products decreased by $52 million to $5,404 million, or approximately 47% of consolidated net sales for the 2010 Year-to-Date Period, compared to $5,456 million, or 48% of consolidated net sales for the 2009 Year-to-Date Period. The decrease in product sales was primarily due to decreases for combat propulsion systems, commercial shipbuilding products, precision engagement and marine services. These decreases were partially offset by organic sales growth for aircraft modernization, EO/IR, microwave, security and detection systems, and networked communications and sales from the Insight acquired business. See the reportable segment results below for additional discussion of our sales results.

from $2.12. As discussed above, the 2010 Third Quarter includes a debt retirement charge of $5 million, or $0.03 per diluted share, and the 2009 Third Quarter includes a tax benefit of $26 million, or $0.22 per diluted share.

Net income attributable to L-3 in the 2010 Year-to-Date Period increased by $13 million compared to the 2009 Year-to-Date Period, and L-3 Holdings’ diluted EPS increased by $0.21 or 4%, to $5.89 from $5.68. As discussed above, the 2010 Year-to-Date Period includes debt retirement charges of $18 million, or $0.09 per diluted share, and the 2009 Year-to-Date Period includes a tax benefit of $26 million, or $0.22 per diluted share.

Read the The complete Report

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