Defense Unit Lifts L-3's Profit

Second-quarter total sales rise 28% from a year ago.
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L-3 Communications

(LLL) - Get Report

reported an increase in second-quarter earnings, thanks in part to the strong performance of its defense unit, which helped offset the weakness in its commercial aviation products business.

Including charges, L-3 earned $54.3 million, or 53 cents a share, compared with $31.6 million, or 38 cents a share, in the previous-year quarter. Excluding charges, the company earned 60 cents a share. Analysts were expecting 58 cents a share.

Sales were $1.23 billion, up 28% from last year's $955 million. Excluding acquisitions, sales rose 9.3%. Sales from the company's government businesses rose 25.2% to $1.08 billion, from $863.8 million last year. L-3 also said sales in its commercial business increased about 60%, while defense business orders rose 37%, excluding acquisitions.

L-3 expects sales growth in 2003, including acquisitions, of more than 20%, or 8% to 10% excluding acquisitions. The company forecast that operating income will expand more than 25% this year compared with 2002. That would imply a profit of $2.63 to $2.68 a share, including a loss of 7 cents a share due to the retirement of debt in June, L-3 said.

Analysts currently expect full-year earnings of $2.73 a share, on average.

Looking to 2004, L-3 said it believes the commercial aircraft market will begin to recover toward the end of the year. The company also said it's open to more acquisitions and sees "many attractive and affordable properties in the $50 million to $300 million revenue range."

Shares of L-3 were losing 35 cents to $46.35 on the

New York Stock Exchange