New York City-based defense contractor L-3 Communications (NYSE: LLL ) shares rose in midday trading Tuesday trading, following a Q3 2013 earnings report that blew away analyst expectations for profit, despite missing the mark somewhat on revenues.
Earnings per share at L-3 amounted to $2.23 per diluted share, 13% above last year's level, and significantly ahead of analysts' estimated $1.95 per share. Much of the earnings beat owed to the fact that L-3 recorded a $0.26 tax benefit during this year's third quarter, but even without it, L-3 would have topped expectations by a couple of cents. Revenues, meanwhile, fell just short of $3 billion, and failed to satisfy analysts' consensus expectation that they would exceed $3 billion.
L-3's revenues for the quarter were down nearly 9% in comparison to last year's Q3. Yet even so, company CEO Michael T. Strianese expressed pleasure at the results in a "challenging" business environment, noting that despite lower revenues, the company managed to produce "higher operating margins, EPS and solid cash flow."
Operating profit margins at L-3 grew 40 basis points over Q3 2012 levels. The 10.5% operating profit margin reported was also ahead of the curve for how L-3 performed earlier this year, helping to lift the company's profit margin to 10% year-to-date.