FLIR Systems Lags Q4 Earnings, Issues Full-Year Guidance (Revised)
FLIR Systems Inc. FLIR reported fourth-quarter 2015 earnings per share of 51 cents, which stood flat year over year. This was mainly because benefits from after-tax gain on sale of an investment of $12.7 million were offset by after-tax restructuring charges of $0.2 million and discrete tax charges of $7.4 million.
Earnings per share (excluding tax benefits) were 47 cents, which lagged the Zacks Consensus Estimate by a penny. A rise in cost of goods sold proved to be a headwind.
For full-year 2015, the company reported earnings per share of $1.72, up 23.7% year over year. A fall in operating expenses and top-line growth supplemented the earnings performance. On the other hand, strong operational discipline and stringent cost-cutting measures benefited the bottom-line growth.
Inside the Headlines
Total revenue came in at $437.6 million, relatively flat (up a meager 0.7%) year over year. However, in terms of constant currency, revenues were up 3% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $433 million.
While a rise in sales across two of the company’s six segments supplemented the top-line performance, decline in the other four segments proved to be a drag. Currency fluctuations also limited the revenues during the fourth quarter.
For full-year 2015, the company reported revenues of $1,557.1 million, up 1.7% year over year.
As for the segments, Surveillance revenues were down 4.6% year over year to $150.7 million; while revenues from Instruments fell 4.7% to $98.6 million. OEM & Emerging Markets revenues declined 2% to $49.2 million, and Maritime revenues witnessed 10% decline to $ 36.0 million.
However, Security segment revenues managed to impress with 21.3% growth to $68.4 million. Also, Detection revenues supplemented the overall top-line growth momentum, increasing 32.4% to $34.7 million.
FLIR's order backlog for the coming 12 months was about $604 million as of Dec 31, 2015, reflecting a year-over-year increase of 10.4%.
Operating income came in at $93.5 million compared with $87.4 million in the prior-year quarter. Considerable fall in pre-tax charges related to the previously announced restructuring initiatives aided operating income growth.
Liquidity & Cash Flow
As of Dec 31, 2015, the company's cash and cash equivalents were $472.8 million compared with $531.4 million as of Dec 31, 2014. Long-term debt totaled $93.7 million, down significantly from the year-ago tally of $358.0 million.
Cash flow from operations came in at $78.3 million, as against $62.8 million as of Dec 31, 2014.
Dividend Hike
Concurrent with the earnings release, FLIR ushered in good news for investors. The company has approved a quarterly cash dividend of 12 cents per share, reflecting an increase of 9% from the prior payment. The dividend will be paid on Mar 10, 2016 to shareholders of record as of Feb 19.
Guidance
Based on the current market scenario, FLIR has offered its guidance for full-year 2016. The company expects revenues in the range of $1.6–$1.65 billion and net earnings within $1.60–$1.70.
To Conclude
FLIR Systems’ financial performance during the fourth quarter was largely positive, but currency fluctuations and broader macroeconomic uncertainties acted as headwinds. The company’s strong focus on execution and reduction of operating costs drove its profitability. We believe strong growth in sales booking and robust backlog levels signal bright prospects for the firm.
Going forward, we expect the company’s strong commitment toward introducing products by leveraging its proprietary “Infrared Guided Measurement” (“IGM”) and “Lepton thermal camera core” technologies to help it expand its customer base and enter new markets.
FLIR Systems currently carries a Zacks Rank #3 (Hold). Better-ranked stocks include L-3 Communications Holdings Inc. LLL, II-VI Incorporated IIVI and Arotech Corporation ARTX. While both L-3 Communications and II-VI Incorporated sport a Zacks Rank #1 (Strong Buy), Arotech Corporation holds a Zacks Rank #2 (Buy).
We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.
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