FLIR Systems Inc. (FLIR) reported earnings per share from continuing operations of 35 cents for the first quarter of 2010, exceeding the Zacks Consensus Estimate of 34 cents. Revenues for the quarter were $287.3 million, up 6% compared to that in the first quarter 2009.
Revenue from the Company’s Government Systems division decreased 2% from the first quarter of 2009, to $158.3 million. Revenue from the Company’s Commercial Systems division increased 17% over the first quarter of 2009, to $129.0 million. Within the Commercial Systems’ division, revenue from Commercial Vision Systems increased 16% over the year-ago quarter, to $53.4 million, reflecting solid growth across multiple product lines.
Revenue from Thermography increased 18% from the first quarter of last year, to $75.6 million, reflecting robust growth in the U.S. and Asia-Pacific regions.
Order backlog stood at $543 million at the end of the quarter, a sequential decline of 20%. Management reaffirmed its outlook for revenue and earnings per share for the full year 2010. It expects revenue for 2010 to be in the range of $1.2 billion to $1.3 billion, an increase of approximately 9% compared to 2009, and net earnings to be in the range of $1.48 to $1.53 per diluted share, an increase of approximately 4% compared to 2009.
The company produces invisible infrared cameras and night vision technology, which is 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 attractive valuation.
FLIR is a pure play on thermal imaging and infrared technology, an area with lots of 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 revenue from contracts or subcontracts with U.S. government agencies. A significant reduction in the purchase of its products by these agencies would have an adverse impact on its business.
FLIR 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: Thermography, Commercial Vision Systems and Government Systems.
We currently have a Neutral recommendation on FLIR.
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