Exelis reports first-quarter 2013 financial results; reaffirms 2013 forecast

  • Revenue and earnings results in line with company expectations
  • Corporate restructuring initiative on-plan
  • Program performance driving improved operating income in Information and Technical Services segment

MCLEAN, Va. — (BUSINESS WIRE) — May 3, 2013 — ITT Exelis (NYSE: XLS) reported first-quarter 2013 financial results today. First-quarter revenue was $1.2 billion, compared to $1.4 billion in the first quarter of 2012. Operating income was $74 million and net earnings were $0.23 per diluted share, compared to $138 million and $0.37 per diluted share during the same period in 2012. As expected, results for the first quarter of 2013 were impacted by $49 million in restructuring charges incurred by the company as it aligns its headcount, footprint and cost structure more closely with customer and market conditions.

Significant new orders announced during the first quarter of 2013 included a $102 million contract to provide electronic support measures suites for two classes of Australian warships; a multimillion dollar contract to provide South Korea with an advanced geostationary weather imager; the company’s first base operations contract for the U.S. Navy in Deveselu, Romania; and multiple international orders, totaling more than $40 million, for communications equipment and sustainment. Exelis also completed the acquisition of C4i Pty. Ltd., an Australian company that provides advanced communications software that is integral to air traffic management systems and mobile communications solutions around the globe.

“Our first quarter results were in line with expectations. We secured several significant orders from international customers and our restructuring efforts are proceeding on schedule,” said Exelis CEO and President David F. Melcher. “While challenges and uncertainties remain within the U.S. defense and aerospace market, we continue to focus on cost improvement, operational efficiency and delivering value to our customers and shareholders.”

Segment Results

C4ISR Electronics and Systems

C4ISR Electronics and Systems first-quarter 2013 revenue was $499 million, compared to $653 million during the same period in 2012, mainly due to decreased sales of SINCGARS, night vision and counter-IED products, partially offset by increased international demand for airborne electronic warfare equipment. Segment operating income for the quarter was $19 million, versus $91 million for the first quarter of 2012, primarily driven by volume declines and restructuring charges taken in the segment during the first three months of 2013.

Information and Technical Services

Information and Technical Services first-quarter 2013 revenue was $686 million, compared to $768 million in the first quarter of 2012, primarily due to decreased activity on several Information Systems and Middle East facility operations programs. Segment operating income for the quarter was $55 million, compared to $47 million for the same period in 2012, positively impacted by contract productivity improvements, but partially offset by higher restructuring charges.

2013 Guidance

Exelis also reaffirms its previously published guidance for 2013 sales, operating margin, earnings per share and free cash flow.

         
Sales       $5.0 billion - $5.1 billion
Operating Margin       9.4% - 9.8%
Earnings Per Share       $1.45 - $1.55
Free Cash Flow       > $225 million
     

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