L-3 Communications Holdings, Inc. (NYSE:LLL) today reported diluted earnings per share (diluted EPS) of $2.01 for the quarter ended March 28, 2014 (2014 first quarter), a decrease of 5%, compared to $2.11 for the quarter ended March 29, 2013 (2013 first quarter). The 2013 first quarter included a $12 million ($0.13 per diluted share) tax benefit for the retroactive reinstatement of the U.S. Federal research and experimentation (R&E) tax credit for 2012 and 2013. Net sales of $3.0 billion for the 2014 first quarter decreased by 7% compared to the 2013 first quarter.
“We delivered solid performance in the first quarter despite continued reductions in U.S. defense spending. L-3 reported strong orders, resulting in a book-to-bill ratio of 1.01, and sales to international and commercial customers increased to 29% of our total sales. We continue to successfully manage through the DoD (Department of Defense) sequestration budget cuts and reduced spending on Afghanistan by focusing on program execution, growing our international and commercial business and providing cost-effective solutions to our customers worldwide,” said Michael T. Strianese, chairman, president and chief executive officer. “We remain focused on improving efficiencies across our businesses, increasing market share and pursuing opportunities in adjacent markets.”
“We also continue to execute our disciplined M&A and cash allocation strategy. During the quarter, we acquired Data Tactics Corporation, which enhances our National Security Solutions (NSS) segment by adding capabilities in large-scale data analytics, cybersecurity and cloud computing. The acquisition also creates opportunities for our Intelligence, Surveillance and Reconnaissance (ISR) Systems business. We also continued to deploy our cash flow to increase shareholder value through repurchases of $133 million of our common stock and dividends of $55 million. During the first quarter, our board of directors increased L-3’s quarterly cash dividend by 9% to $0.60 per share, marking our tenth consecutive annual increase and demonstrating our confidence in L-3’s business strategy and outlook.”