L-3, Act 1: Fool by Numbers

On April 23, defense and communications expert L-3 Communications (NYSE: LLL  ) released first-quarter earnings for the period ended March 31.

• Net sales increased by 13.6%, with 9.1% organic sales growth. Organic sales were driven by strong demand for government services, aircraft modernization, base support operations, intelligence, and surveillance.
• Management expects revenues in the range of $13.2 billion to $13.3 billion for fiscal '07, with diluted EPS of $5.65 to $5.75.
• The stock carries a solid four-star rating (out of five) in Motley Fool CAPS.

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q1 2007	Q1 2006	Change
Sales	$3,299.7	$2,903.8	13.6%
Net Profit	$162.1	$138.9	16.7%
EPS	$1.29	$1.13	14.2%
Diluted Shares	126.0	123.3	2.2%

Get back to basics with the income statement.

Margin Checkup

	Q1 2007	Q1 2006	Change*
	9.9%	9.9%	(0.1)
	9.9%	9.9%	(0.1)
	4.9%	4.8%	0.1

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2007	Q1 2006	Change
Cash + ST Invest.	$387.1	$172.6	124.3%

Liabilities	Q1 2007	Q1 2006	Change
Long-Term Debt	$4,535.3	$4,633.8	(2.1%)

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q1 2007	Q1 2006	Change
Cash From Ops.	$223.9	$187.5	19.4%
Capital Expenditures	$28.7	$27.1	5.9%
Free Cash Flow	$195.2	$160.4	21.7%

Free cash flow is a Fool's best friend.

Related Foolishness:

• L-3 Wants a Recount
• Foolish Forecast: L-3's Communicating
• Foolish Forecast: 3 in a Row for L-3

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.