Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of FLIR Systems (FLIR) have steadily risen throughout the day, and are now sitting on gains of nearly 11% as of this writing, after reporting earnings this morning that primarily showed strength on the top line.
So what: FLIR's second-quarter revenue came in 15% higher year over year with a final result of $389.3 million, which was a fair bit ahead of the analyst consensus of $364.9 million. However, earnings of $0.35 per share were underwhelming, as Wall Street sought $0.37 per share for the quarter. The company's full-year guidance, which projects $1.5 billion-$1.6 billion on the top line and $1.56-$1.66 in EPS, doesn't exactly smash through consensus top- and bottom-line expectations of $1.5 billion and $1.64, respectively.
Now what: Investors may simply be breathing a sigh of relief over FLIR's ability to withstand the impact of the government sequester that was widely feared to hit many government contractors. The company's government systems backlog grew 5% year over year, which indicates some remaining strength where many might have not seen it. However, after the recent bounce, FLIR is nearing highs last reached in 2011, and the report was only good enough for S&P to raise its price target to $32 per share -- slightly lower than where shares traded as of this writing. A patent infringement suit that was filed today also puts a few clouds on FLIR's horizon. Step lightly into this stock, if you decide to step in at all.
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