Please ensure Javascript is enabled for purposes of website accessibility

Why FLIR Systems Stock Tanked Today

By Evan Niu, CFA - Feb 27, 2020 at 2:41PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The thermal imaging company reported disappointing fourth-quarter results.

What happened

Shares of FLIR Systems (FLIR) have tanked today, down by 18% as of 2 p.m. EST, after the company reported fourth-quarter earnings. The thermal imaging specialist missed expectations for both the top and bottom lines.

So what

Revenue in the fourth quarter came in at $489 million, shy of the consensus estimate that called for $500.7 million in sales. That led to adjusted net income of $74.8 million, or $0.55 per share, compared to the $0.62 per share in adjusted profits that analysts were expecting. Adjusted operating margin took a hit due to "ongoing export compliance expenses" and increased research and development costs.

Red stock chart going down

Image source: Getty Images.

"FLIR finished 2019 with full year revenue of $1.9 billion and fourth quarter results that reflect a continuation of many of the trends we experienced in the third quarter," CEO Jim Cannon said in a statement. "Our Government and Defense and Industrial Business Units delivered performances highlighted by fourth quarter revenue growth and expanding full year backlog."

Now what

FLIR recently launched "Project Be Ready," which will reorganize the company into two business units, down from three currently. That initiative entailed discontinuing some products, and FLIR is looking into selling off its Raymarine non-thermal maritime electronics business. "This initiative aims to simplify our product portfolio and better align resources with higher growth opportunities while reducing costs," said Cannon.

The tech company issued guidance for 2020 that calls for revenue of $1.85 billion to $1.93 billion, which is expected to translate into adjusted earnings per share of $2.10 to $2.30 for the year.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

FLIR Systems, Inc. Stock Quote
FLIR Systems, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.