In part because of the new stimulus package, spending for military defense in 2009 is around $650 billion – twice what it was after 9/11. This is an early present for companies concerned with aerospace and defense.
Companies such as FLIR Systems, Inc. (Nasdaq: FLIR) – the global leader in design, manufacturing and marketing of Infrared cameras, night vision and thermal imaging systems – who posted very favorable fourth quarter earnings just a couple of weeks ago.
Revenue was $302.3 million, up 25% compared to fourth quarter 2007 revenue of $242.6 million; operating income for the quarter was $88.1 million, up 40% from $62.9 million in the fourth quarter of 2007; and net income was $65.3 million compared with net income of $46.6 million in the fourth quarter a year ago.
Growth was strong in many of their divisions. Particularly, revenue in FLIR’s Government Systems and Commercial Vision Systems divisions also increased by 50% and 12% respectively.
One reason for this boost is FLIR’s profitable acquisition strategy. The purchase of the Extech Instruments and Cedip Infrared Systems contributed $13.2 million in thermography revenue, up from $5.4 million in the 2007’s fourth quarter.
It’s no wonder the CEO has been so pleased…
“We are very pleased with our financial performance in 2008, as we recorded our eighth straight year of record revenue, operating income and earnings per share, and achieved the highest operating income margin and cash flow from operations in the Company’s history,” said President and CEO Earl Lewis.
“We are well positioned for continued growth, and each of our divisions remains focused on their core strategies. Our 2009 outlook anticipates continued growth in all three divisions, particularly our Government Systems and Commercial Vision Systems businesses, which are supported by strong backlogs.”
The company backlog is another one of the big reasons for FLIR’s recent success: Orders for delivery in the next 12 months increased about $13 million for the quarter – $270 million for the year – to $663 million. A healthy backlog allows a company to plan and budget expenses better.
Because the company’s products “play pivotal roles in a wide range of industrial, commercial and government activities in more than 60 countries,” things should only go up from here.
FLIR expects net revenue in 2009 to be between $1.2 billion and $1.25 billion, which compared to 2008 would be an increase 14%. It also anticipates net earnings to increase 12%, around $1.40 to $1.47 per diluted share.
And demand continues to remain strong in most of its product lines. Lewis stated that, “While our entire community is facing unprecedented challenges, we remain committed to pursuing the proven strategies that have delivered superior long-term results for our shareholders.”
You don’t need infrared technology to see that this stock is going up.
by Katharine Schildt, Assistant Editor, The Oxford Club