Record Quarter for Engineered Support Systems

The defense contractor benefits from work in Afghanistan and Iraq.
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Engineered Support Systems

(EASI) - Get Report

reported record third-quarter earnings, thanks party to its government work in Afghanistan and Iraq, and reaffirmed future guidance.

The St. Louis-based company said net income rose by two-thirds to $20.5 million, or 73 cents a share, based on continuing operations vs. $12.4 million, or 48 cents a share, in the year-ago period. Excluding charges related to the sale of a plant, the company had a profit of $21.3 million, or 76 cents a share. Analysts were expecting 75 cents a share, according to Thomson First Call.

Revenue rose 43% to a record $222 million "on the strength of recent acquisitions and exceptional organic growth," the company said.

The defense contractor also held to its 2004 fiscal forecast of EPS of $2.65 to $2.70 on revenue of $840 million. The consensus forecast is for $2.70 a share on revenue of $848.6 million.

Engineered Support also said it expects fiscal 2005 organic earnings growth of 9% to 13% with EPS from continuing operations of $2.95 to $3. Analysts expect the company to earn $2.98 a share on revenue of $926.5 million.

"Organic revenue growth has been outstanding in all areas of the company, partly related to business opportunities emerging from ongoing U.S. military operations in Iraq and Afghanistan but, as importantly, many as a result of the wide range of capabilities that we can now offer the military and intelligence communities," the company said. "The breadth of our capabilities represents the backbone of our business and will serve our customers, employees and shareholders well over the long haul."

Shares rose 66 cents, or 1.5%, to $43.80 in premarket trading.