FLIR Systems Inc. (FLIR) released its first-quarter 2013 results. The company reported earnings from continuing operations of 35 cents a share in the quarter, a penny above the Zacks Consensus Estimate of 34 cents and 12.9% higher than the prior-year earnings of 31 cents a share.
Overall efficiency of the company and effective cost control measures helped FLIR to generate strong profits during the quarter.
Total revenue was $348.6 million in the first quarter, flat year over year. Flat revenues were primarily attributable to slow or delayed deliveries, primarily to the U.S. customers. In addition, revenue growth was fully offset by the decline in the other segment.
Total backlog at the end of the quarter was approximately $505 million, down $15 million during the quarter versus the first quarter of 2012. However, backlog increased 10% or $48 million year over year.
Commercial Systems division’s revenues were $211.8 million in the quarter, up 5% year over year. Within the Commercial Systems division, the Thermal Vision and Measurement segment revenues increased 7% to $167.4 million. Commercial Systems’ Raymarine segment revenue was $44.4 million, down 5% year over year.
The Commercial Systems division bookings in the first quarter increased 6% year over year. Thermal Vision Measurement bookings increased 11% year over year, while Raymarine bookings declined 8%. Thermal Vision Measurement's thermography line of business reported a 7% decline in bookings from a year ago, primarily due to weak European economy and dull building market in the U.S.
Government Systems division’s revenues came in at $136.8 million in the quarter, down 6% year over year. The division was affected by difficult market environment. Within the division, the Surveillance segment revenue declined 4% to $110.2 million. Detection segment revenue was $12.5 million, down 35% while Integrated Systems segment revenue was $14 million, up 15%.
Backlog for the division at the end of the first quarter was $334 million. The company’s stock order flow in the U.S. was partially offset by good international bookings. International orders accounted for 60% of total bookings in the reported quarter.
Income and Expenses
Operating income in the first quarter was $69.1 million compared to $68.3 million in the first quarter of 2012. Selling and general expense was $78.2 million compared with $77.8 million whereas research and development expense was $36.6 million, flat year over year.
Cash and cash equivalents were $246.0 million at the end of the quarter with long-term debt of $248.4 million and shareholders’ equity of $1.52 billion.
Cash flow from operations amounted to $61.9 million during the quarter. The company repurchased 3.8 million shares for $26.22 per share during the quarter.
Concurrent with the earnings release, management reaffirmed its fiscal 2013 guidance. FLIR Systems expects earnings per share for 2013 to be in the range of $1.56 to $1.66 per share, reflecting an increase of 8% to 14% from 2012. Total revenue is expected to be in the range of $1.5 billion to $1.6 billion, an increase of 7% to 14% from 2012.
FLIR currently has a Zacks Rank #2 (Buy), which is a good pick at the moment. In addition, some other stocks that are worth considering are Honeywell International (HON), Crane Co. (CR) and Raven Industries Inc. (RAVN), all having Zacks Rank #2 (Buy).
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