FLIR Systems reports 2Q results

FLIR Systems said second-quarter revenue totaled $402.7 million.
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FLIR Systems said second-quarter revenue totaled $402.7 million, up 2 percent from the same period last year, and operating income was $65.2 million, compared with $70.5 million last year.

Profitability in comparison to the prior year was negatively affected by changes in product mix, manufacturing cost under-absorption and additional costs associated with the ramp-up of an internal low-cost optics capability, the company said.

Revenue of $782 million for the year through June 30 was 6 percent above the prior year.

Second-quarter net earnings were $45.4 million, or 33 cents a diluted share, compared with $50.5 million, or 36 cents a share, in the quarter a year earlier.

Expectations for net earnings this year were revised downward from a range of $1.60 to $1.70 a diluted share to $1.60 to $1.65 a diluted share.

Revenue from the surveillance segment was $113.4 million, an increase of 5 percent from the quarter last year.

The instruments segment contributed $78.1 million of revenue during the quarter, down 14 percent from the prior year, because of continued softness in mid-range handheld thermal products and strong MERS-related revenue in the prior year.

Revenue from the maritime segment was $55.2 million, up 6 percent from the quarter last year.

The security segment recorded revenue of $63.4 million in the quarter, up 6 percent from the prior year. FLIR's OEM and emerging-markets segment had $57 million of revenue, an increase of 23 percent from the prior year.

The detection segment contributed $35.7 million of revenue, a decrease of 2 percent from the prior year.

FLIR's backlog of firm orders for delivery in the next 12 months was about $629 million as of June 30, an increase of $16 million, or 3 percent, during the quarter and an increase of $93 million, or 17 percent, from the $536 million balance at the end of the second quarter last year.

"We are encouraged by the growth we saw in our bookings and backlog during the second quarter, and our initiatives to improve working capital utilization resulted in strong cash flow," FLIR president and CEO Andy Teich said in a statement.

"As we anticipated, profitability during the second quarter was lower than our historic trend, given an unusual product mix in our surveillance segment, as well as higher costs in our instruments and security segments,” Teich said.

“While we expect product mix to return to normal levels in the second half of the year, we have initiated a plan to reduce our costs, which we expect to improve our overall profitability in the second half.”

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