FLIR Systems said third-quarter revenue increased 8 percent, with the Raymarine segment up 13 percent from the prior year, but the company said a softening in its government sector is causing it to lower its outlook.
Revenue was $358.1 million, up 8 percent from third-quarter 2012 revenue of $332.2 million. The Raymarine segment contributed $35.8 million during the quarter, up 13 percent from the prior year, driven by successful new-product introductions.
Operating income for the quarter that ended Sept. 30 fell 14 percent, to $63.5 million, and net income declined 17 percent, to $46.5 million, or 32 cents a diluted share, from $55.9 million, or 37 cents a share, a year earlier.
"Results for the third quarter were disappointing; however, with the exception of our OEM cores business, our commercial systems business grew [by] mid-single digits, with each of the major geographic regions showing growth for the first time in two years,” FLIR president and CEO Andy Teich said in a statement. “We were also pleased with the performance of our recently acquired businesses, which delivered good growth and profitability for the quarter.”
However, a weakness in order flow from U.S. government-funded customers affected book-and-ship business during the quarter and, more important, the outlook for the fourth quarter, Teich said.
“In addition to our strategic realignment plan, we have initiated changes to our cost structure to better operate under the assumption of a challenging domestic government procurement environment. We expect to see significant productivity and profitability gains from these actions in 2014 and beyond," he said.
Based on financial results for the first nine months of 2013 and the outlook for the remainder of the year, FLIR now expects 2013 revenue to be in the range of $1.45 billion to $1.5 billion and net income, excluding restructuring charges associated with business realignment and cost reduction initiatives, as well as executive retirement charges, to be in the range of $1.38 to $1.43 a diluted share. These estimates compare with management's prior outlook of revenue of $1.5 billion to $1.6 billion and net income of $1.56 to $1.66 a diluted share.