FLIR Systems, Inc (FLIR) reported fourth quarter 2010 earnings per share from continuing operations of 43 cents compared to the Zacks Consensus Estimate of 44 cents. Revenues for the quarter were $434 million, up 39% compared to the prior-year quarter. This was ahead of Zacks Consensus revenue estimate of $425 million.
The acquisition of ICx Technologies was closed in the quarter, with net contribution of $46.1 million in revenues and $2.1 million in operating income.
Revenue from the Government Systems segment increased 1% year over year, to $171.7 million. Revenue from Thermography segment increased 18% from the prior-year quarter to $100.0 million, led by growth in Asia-Pacific and robust sales of both value and mid-priced cameras.
Revenue from Commercial Vision Systems increased 35% year over year to $76.7 million, due to growth in cores and security products. Revenue from Raymarine was $40.0 million.
SG& A expenses were 22.1% of revenues, up from 19.6% of revenues in 4Q09. Operating income was $100 million with a 23% margin, down 5.6% from the year-ago quarter.
The company’s backlog of orders for delivery within the next year was approximately $534 million at Dec. 31, 2010, flat sequentially. Cash provided by operating activities in the fourth quarter was $45.5 million.
Cash and equivalents were $193 million with no long-term debt and shareholders’ equity of $1.5 billion.
FLIR produces invisible infrared cameras and night vision technology, which are used at all American airports. FLIR’s equipment is also used to protect nuclear facilities and U.S. bases in Afghanistan. Bullishness on FLIR is attributed to rising orders and what seems to be an attractive valuation. FLIR is a pure play in the thermal imaging and infrared technology space, an area that boasts immense growth potential.
The company has developed extensive competencies in the design and integration of numerous capabilities and payloads into integrated systems or sub-systems. Competencies such as stabilization, packaging and systems integration allow it to effectively combine a wide variety of technologies and payloads to design and manufacture complex systems to suit its customers’ needs.
The company derives significant revenues from contracts or subcontracts with U.S. government agencies. The funding of contracts awarded to the company depends on the overall US government budget and appropriation process, which is beyond its control.
Flir Systems Inc. is a leader in the design, manufacture and marketing of thermal imaging systems. Its products are used in a wide variety of applications in commercial, industrial and government markets, internationally as well as domestically.
It offers a variety of system configurations to suit specific customer requirements. Its business is organized into three divisions: Government Systems, Commercial Vision Systems and Thermography Products. L-3 Communications Holdings Inc (LLL) and Lockheed Martin Corporation (LMT) are major competitors.
We currently have a Neutral recommendation on FLIR Systems.
FLIR SYSTEMS (FLIR): Free Stock Analysis Report
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