Armor Holdings (AH) posted a sharp drop in third-quarter earnings, citing dilution tied to its Stewart & Stevenson buy.
The Jacksonville, Fla., Humvee armorer made $21 million, or 58 cents a share, for the quarter ended Sept. 30, down from the year-ago $26.5 million, or 74 cents a share. Revenue rose to $563 million from $448 million a year earlier.
The company said the Stewart & Stevenson deal trimmed earnings by 17 cents.
Analysts surveyed by Thomson Financial were looking for a 62-cent profit on sales of $642 million.
"While we were disappointed by lower than previously anticipated third quarter revenue and earnings, we are encouraged by a number of positive developments during the third quarter," the company said. "We announced during the quarter approximately $900 million of new contracts, of which approximately $700 million were funded and our overall backlog increased. The Stewart & Stevenson integration is proceeding smoothly and ahead of plan, and achieving gross margins slightly better than we had anticipated. Also, the company's consolidated free cash flow is ahead of plan for 2006."
The company guided to full-year earnings of $3.55 to $3.65 a share, in line with the $3.62 Thomson target.