- $1.5 billion in funded orders in the quarter and funded backlog increase of 15 percent over the second quarter of 2014
- C4ISR segment revenue increases year-over-year for second consecutive quarter
- 2014 full-year guidance revised to reflect successful spin-off of Vectrus
MCLEAN, Va. — (BUSINESS WIRE) — October 31, 2014 — Exelis ( NYSE: XLS) reported financial results for the third quarter of 2014. Third-quarter revenue was $1.1 billion, a six percent decrease from the third quarter of 2013, and third-quarter earnings were $52 million, or $0.27 per diluted share, a 34 percent decrease from the third quarter of 2013. Adjusted earnings, which exclude costs related to the spin-off of Vectrus, were $0.32 per share, a 22 percent decrease from the same period in 2013. Exelis generated $39 million in free cash flow during the quarter.
The company earned $1.5 billion in funded orders during the third quarter of 2014, including new business in its strategic growth platforms. Key announcements during the quarter included:
- Completion of the spin-off of the former Mission Systems business into Vectrus, a separate, publicly traded government services provider;
- A contract to provide advanced military air traffic management capabilities to the Saudi Arabian National Guard;
- An award from the U.S. Army for Generation 3 night vision equipment;
- A follow-on contract from Lockheed Martin for composite missile bodies and structures for the Joint Air-to-Surface Standoff Missile;
- Acquisition of Barco Orthogon, based in Bremen, Germany, which provides applications for air traffic flow management and decision-making to airport operators and air navigation service providers around the world.
“We are encouraged by the developing trend of revenue growth in our C4ISR segment and continue to earn new business in each of our strategic growth platforms, as well as from targeted international and commercial customers,” said Exelis CEO and President David F. Melcher. “Successful completion of the Vectrus spinoff was also a major milestone for us in the third quarter and positions both companies for success in the future.”
Segment Results
C4ISR Electronics and Systems
C4ISR Electronics and Systems third-quarter 2014 revenue was $503 million, up 1 percent from the same period in 2013 due to higher revenue on airborne and shipboard electronic warfare products, partially offset by lower revenue from domestic radios. Segment adjusted operating income for the quarter was $64 million, a decrease of 7 percent from the third quarter of 2013.
Information and Technical Services
Information and Technical Services third-quarter 2014 revenue was $565 million, a decrease of 12 percent from the same period in 2013, driven by lower customer activity in several U.S. government programs in Afghanistan. Third-quarter adjusted operating income for the segment was $47 million, down 27 percent from the same period in 2013, primarily due to lower revenue.
2014 Guidance
| Sales | ≈$3.25 billion | ||
| Adjusted Operating Margin | ≈12.5% | ||
| Adjusted Earnings Per Share | ≈$1.22 | ||
| Free Cash Flow | ≈$140 million | ||
