- First-quarter revenue of $1.4 billion was up 6 percent compared to same period in 2011
- Company secures new international product orders, extends several key service contracts
MCLEAN, Va. — (BUSINESS WIRE) — May 4, 2012 — ITT Exelis (NYSE: XLS) today reported 2012 first quarter revenue of $1.4 billion, a 6 percent increase over the same previous-year period. Net income was $70 million, down 15 percent from the first quarter of 2011, due in part to costs associated with the company’s recent spinoff from ITT Corporation. Adjusted operating income grew 29 percent, to $151 million, and adjusted operating margin improved to 10.6 percent from 8.7 percent in the first quarter of the previous year. Adjusted earnings were $0.47 per share, up 4 percent from the same period in 2011.
The company secured several strategic international product contracts during the first quarter, including: aircraft weapons release equipment to Saudi Arabia, night vision goggles to the United Kingdom and radiation detection sensors to Japan. Exelis also signed a memorandum of understanding with technology company Tata Advanced Systems, Limited to assemble and sell night vision equipment in India. The company was successful in retaining or extending several large U.S. military services contracts, including Operations Maintenance and Supply-Europe (OPMAS-E) which was re-awarded to Exelis and is potentially worth as much as $160 million in revenue with all options exercised.
During the quarter, Exelis completed the acquisition of Applied Kilovolts Group Holdings, Limited, a leading provider of precision high voltage power supplies for medical, scientific, pharmaceutical and food safety instruments. The acquisition supports a key growth strategy for the company, enabling the expansion of its position as a leading provider of geospatial solutions from sensors to decisions, in this case, as a supplier of key components for the high-growth medical and scientific instrumentation market.
“Despite continued challenges in the U.S. defense market, Exelis delivered solid results in the first quarter of 2012, while advancing critical technologies, adding new capabilities to our business portfolio and managing our pension,” said Dave Melcher, Chief Executive Officer and President of Exelis. “We also capitalized on several key international product sales opportunities and are excited to continue serving our valued customers through extensions and recompetes on several service contract programs.”
Segment Results
C4ISR Electronics and Systems
C4ISR Electronics and Systems first-quarter 2012 revenue was $653 million, down 5 percent from the same period in 2011, due to expected declines in sales of radios, jammers and domestic night vision equipment, partially offset by increased sales of upgrade kits to the installed base of CREW jammers. C4ISR Electronics and Systems first-quarter adjusted operating income rose to $99 million, 22 percent higher than the first-quarter of 2011, driven by benefits from restructuring and decreased pension expenses.
Information and Technical Services
Information and Technical Services first-quarter 2012 revenue was $768 million, 16 percent higher than the same period in 2011, due to several large services contracts reaching full operational tempo. First-quarter adjusted operating income for the segment was $52 million, up 44 percent over the first quarter of 2011, primarily due to program productivity and decreased pension expenses.
2012 Guidance
The company confirms its guidance for full-year 2012. Full-year 2012 revenue is expected to be $5.4 billion to $5.5 billion, a decrease of 7 percent from 2011. Full-year adjusted operating margin is expected to be 10.6 percent to 10.8 percent, an increase of 60 to 80 basis points year-over-year. Adjusted earnings are expected in the range of $1.80 to $1.86 per share, down 8 percent from 2011. The company notes that forward-looking statements of future performance made in this release are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the Safe Harbor Statement below.
Investor Call Today
Exelis senior management will host a conference call for investors today at 10 a.m. Eastern Daylight Time to review first-quarter 2012 results and answer questions. The briefing can be monitored live via webcast at the following address on the company's website: www.exelisinc.com/investors.
About ITT Exelis
Exelis is a diversified, top-tier global aerospace, defense and
information solutions company with strong positions in enduring and
emerging global markets. Exelis is a leader in networked communications,
sensing and surveillance, electronic warfare, navigation, air traffic
solutions and information systems with growing positions in cyber
security, composite aerostructures, logistics and technical services.
The company has a 50-year legacy of innovation and technology expertise,
partnering with customers worldwide to deliver affordable,
mission-critical products and services for managing global threats,
conflicts and complexities. Headquartered in McLean, Va., the company
employs about 20,500 people and generated 2011 sales of $5.8 billion.
www.exelisinc.com
