L-3 Communications Posts Earnings Beat, Buys Satellite Company

L-3 Communications reported this morning its Q1 earnings climbed 14% to $1.29/share on 14% higher sales ($3.3 billion) -- just beating analyst estimates of $1.27/share on revenue of $3.2 billion. The company raised 2007 EPS forecast to $5.65-$5.75 on sales of $13.2-$13.3 billion; its previous forecast was from $5.55-5.65/share on revenue of $12.9-$13.1 billion and analysts forecast $5.69/share on sales of $13.15 billion. In 2006, L-3 earned $4.22/share on revenue of $12.48 billion. Net income was up 17% to $162 million vs. $139 million in 2006 on strong sales of its military electronics and intelligence services to the DoD. Separately, the company announced it has completed its Jan. 31 acquisition of unmanned aerial vehicle technology provider Geneva Aerospace, and that it has agreed to acquire Global Communications Solutions, a leading provider of portable satellite communications [SATCOM] equipment and products. The GCS acquisition is expected to be completed in Q2, and to generate $90 million in sales this year. CEO Michael T. Strianese said the company continues to invest in new products and technologies and look for acquisitions that add meaningful synergies at attractive prices. He called today's results, "a very good start to the year." Shares are up 0.5% to $92.95 in pre-market trading.

Sources: Earnings press release, Acquisitions press release, MarketWatch, AP, Bloomberg
Commentary: Foolish Forecast: 3 in a Row for L-3? [Motley Fool] • L-3 Communications: Playing Defense • Jim Cramer's Take on LLL
Stocks/ETFs to watch: L-3 Communications Holdings Inc. (LLL). Competitors: Honeywell International Inc. (HON), Lockheed Martin Corp. (LMT), Northrop Grumman Corp. (NOC), Raytheon Company (RTN). ETFs: iShares Dow Jones US Aerospace & Defense (ITA), PowerShares Aerospace & Defense (PPA)

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