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FLIR Systems (FLIR) Q4 Earnings Miss Estimates, Sales Up Y/Y

Zacks Equity Research

FLIR Systems Inc.’s FLIR fourth-quarter 2019 adjusted earnings of 55 cents per share missed the Zacks Consensus Estimate of 62 cents by 11.3%. The reported figure also declined 11.3% from the 62 cents registered in the prior-year quarter.

Excluding the one-time items, the company reported GAAP earnings of a penny compared with the earnings of 71 cents recorded in the year-ago quarter.

The company’s 2019 adjusted earnings of $2.23 per share missed the Zacks Consensus Estimate of $2.30 by 3%. However, the reported figure edged down 0.5% from the prior-year tally of $2.22.

Total Revenues

FLIR Systems’ revenues increased 9% year over year to $489 million in the reported quarter. Improved sales performance of the Industrial and Government and Defense business segments primarily resulted in this year-over-year top-line growth. The top line, however, missed the Zacks Consensus Estimate of $500.2 million by 2.2%.

Meanwhile, Organic revenues decreased 1.5%, which excludes revenues from acquisitions within the last 12 months.

FLIR Systems’ 2019 revenues climbed 6.3% to $1,887 million from the prior-year tally of $1,775.7 million. The top-line figure, however, missed the Zacks Consensus Estimate of $1,900 million by 0.7%. Organic revenue growth was 1.1%, which excludes revenues from acquisitions within the last 12 months and security business divestitures.

Segment Details

In the Industrial segment, revenues totaled $192.8 million, up 6.1% on a year-over-year basis. The upside can be attributed to increased sales on continued strength in cooled cameras and components as well as machine vision. Operating income was $63.5 million, 10.9% higher than the fourth-quarter 2018 tally.

In the Government and Defense segment, revenues summed $210.7 million, up 23.1% on a year-over-year basis. This upswing resulted from increased contributions from the successful acquisitions of Aeryon Labs and Endeavor Robotics. Operating income for the December-end quarter decreased 0.4% year on year to of $53.9 million.

The Commercial segment’s revenues slid 10.6% to $85.5 million from the year-ago period. The segment’s revenues were adversely impacted by lower sales volume in the Outdoor and Tactical Systems and Security product businesses. Operating income was $12.2 million, which fell 19.4% compared with the year-ago quarter’s income.

Adjusted operating income came in at $103.9 million compared with the prior-year quarter’s $107.9 million, reflecting a 3.8% decline. Also, the company’s total operating expenses flared up 25.9% year over year to $178.6 million.

FLIR Systems, Inc. Price, Consensus and EPS Surprise

FLIR Systems, Inc. Price, Consensus and EPS Surprise

FLIR Systems, Inc. price-consensus-eps-surprise-chart | FLIR Systems, Inc. Quote

Liquidity & Cash Flow

As of Dec 31, 2019, the company's cash and cash equivalents were $284.6 million compared with $512.1 million as of Dec 31, 2018.

Long-term debt summed $648.4 million on Dec 31, 2019, significantly up from $421.9 million on Dec 31, 2018.

Cash flow generated from operating activities at the end of 2019 amounted to $370.4 million compared with the prior-year tally of $374.1 million.

Outlook

FLIR Systems has issued its guidance for 2020. The company projects adjusted earnings per share at $2.10-$2.30 on revenues of $1.85-$1.925 billion.

Currently, the Zacks Consensus Estimate for 2020 earnings is pegged at $2.56 on revenues of $2 billion. Both earnings and revenue estimates come in above the projected range of the company’s guidance.

Zacks Rank

FLIR Systems carries a Zacks Rank #3 (Hold), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Teledyne Technologies Inc. TDY posted fourth-quarter 2019 adjusted earnings of $2.90 per share, which surpassed the Zacks Consensus Estimate of $2.76 by 5.1%. The bottom-line figure came in above the guided range of $2.71-$2.76 for the reported quarter.

Lockheed Martin Corp. LMT recorded earnings of $5.29 per share for the final quarter of 2019, outpacing the Zacks Consensus Estimate of $4.99 by 6%. The bottom line also improved 20.5% from the year-ago quarter’s $4.39.

General Dynamics Corporation’s GD delivered earnings from continuing operations of $3.51 per share for the October-December period, which beat the Zacks Consensus Estimate of $3.46 by 1.45%.

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