Flir Systems has a market cap of $3.62 billion; its shares were traded at around $21.65 with a P/E ratio of 14.8 and P/S ratio of 2.4. The dividend yield of Flir Systems stocks is 1.2%. Flir Systems had an annual average earning growth of 24.6% over the past 10 years. GuruFocus rated Flir Systems the business predictability rank of 4-star.
Highlight of Business Operations:Revenue. Consolidated revenue for the three months ended March 31, 2012 decreased by 7.3 percent, from $376.0 million in the first quarter of 2011 to $348.5 million in the first quarter of 2012. The decrease was primarily due to a $35.3 million, or 23.5 percent, decrease in revenue from our Surveillance segment due to reduced demand for our products from the US Government and Middle East government agencies, partially offset by an increase of $10.7 million, or 7.4 percent, in revenue from our Thermal Vision and Measurement segment. Higher revenue in our Thermal Vision and Measurement segment was due to increases in certain systems sales, particularly in the United States, partly offset by lower revenue in Europe due to the weaker economic conditions in that region.
Gross profit. Gross profit for the quarter ended March 31, 2012 was $182.7 million compared to $196.5 million for the same quarter last year. The decrease in gross profit was due to the lower revenue year over year. Gross margin, defined as gross profit divided by revenue, increased slightly from 52.3 percent in the first quarter of 2011 to 52.4 percent in the first quarter of 2012 aided by the elimination of amortization expenses of $3.6 million incurred in the first quarter of 2011 related to fair value adjustments on inventory acquired through the acquisition of ICx Technologies in 2010.
Research and development expenses. Research and development expenses for the first quarter of 2012 totaled $36.6 million, compared to $37.6 million in the first quarter of 2011. As a percentage of revenue, research and development expenses were 10.5 percent and 10.0 percent for the three months ended March 31, 2012 and 2011, respectively, and remain at the upper end of historical research and development spending and of our anticipated long-term research and development spending relative to sales. Over the past five years, our annual research and development expenses have varied between 8.0 and 9.5 percent of revenue.
Selling, general and administrative expenses. Selling, general and administrative expenses were $77.9 million for the quarter ended March 31, 2012, compared to $82.6 million for the quarter ended March 31, 2011. The decrease in selling, general and administrative expenses for the first quarter of 2012 was attributable to decreased spending in each of our business segments, including lower expenses in our Government Systems division associated with cost reduction efforts taken in the third quarter of 2011, and lower corporate legal expenses. Selling, general and administrative expenses as a percentage of revenue were 22.3 percent and 22.0 percent for the quarters ended March 31, 2012 and 2011, respectively. Over the past five years, our annual selling, general and administrative expenses have varied between 19.2 and 23.8 percent of revenue.
Revenue for three months ended March 31, 2012 increased by 8.3 percent compared to the same period of 2011, primarily due to increases in product revenues from U.S. federal, state and local government customers, partially offset by lower research and development contract revenues. The loss from operations for the first quarter of 2011 included the amortization of fair value adjustments on inventory of $2.1 million. The fair value adjustment on inventory related to the purchase price accounting was fully amortized in 2011. The elimination of the inventory adjustment and lower operating expenses were the primary reasons for the improvement in earnings from operations for the first quarter of 2012, compared to the same period of 2011.
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