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FLIR Systems (FLIR) to Report Q1 Earnings: What's in Store?

Zacks Equity Research

FLIR Systems Inc. FLIR is set to report first-quarter 2020 financial results on May 6, before market open. In the last reported quarter, the company delivered a negative earnings surprise of 11.29%.

However, in the trailing four quarters, the company came up with a positive earnings surprise of 0.67%, on average.

Let's take a closer look at the factors influencing FLIR Systems’ quarterly results.

Factors Under Consideration

Due to the ongoing crisis caused by the coronavirus pandemic, the company had to limit its operations during the latter part of the first quarter. As a result, it might have been unable to make significant deliveries. This is likely to have negatively impacted the to-be-reported quarter’s top line. Moreover, discontinuation of specific product lines in the OTS business is likely to have weighed on FLIR Systems’ quarterly revenues.

In line with this, the Zacks Consensus Estimate for first-quarter revenues is pegged at $439 million, indicating an annual decline of 1.35%. The estimate falls below the midpoint of the company’s total revenue expectation of $435-$455 million.

Some disruptions in its supply chain due to the pandemic may have led the company to incur additional costs. Also, with respect to a new project, FLIR Systems earlier announced its expectation to incur restructuring costs of $40-$55 million during 2020-2021, driven by headcount reductions third-party expenses and facility consolidation costs. We may expect part of these expenses along with pandemic-related costs to have dragged down the company’s bottom line in the soon-to-be-reported quarter.

The Zacks Consensus Estimate for FLIR Systems’ first-quarter earnings is pegged at 42 cents per share, implying a 20.8% decline from the year-ago quarter’s reported number. The estimate matches the upper end of the company-provided bottom-line guidance range.

FLIR Systems, Inc. Price and EPS Surprise

FLIR Systems, Inc. Price and EPS Surprise
FLIR Systems, Inc. Price and EPS Surprise

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

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for FLIR Systems this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: FLIR Systems carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some defense companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Spirit Aerosystems Holdings, Inc. SPR has an Earnings ESP of +18.35% and a Zacks Rank #3.

Huntington Ingalls Industries HII has an Earnings ESP of +1.79% and a Zacks Rank #3.

A Recent Defense Release

Lockheed Martin Corp. LMT reported first-quarter 2020 earnings of $6.08 per share, which surpassed the Zacks Consensus Estimate of $5.76 by 5.5%. The bottom line also improved 1.5% from the year-ago quarter’s $5.99.

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FLIR Systems, Inc. (FLIR) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Spirit Aerosystems Holdings, Inc. (SPR) : Free Stock Analysis Report
Huntington Ingalls Industries, Inc. (HII) : Free Stock Analysis Report
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