LLL- Embedded Expectations Analysis - 2019 04 15
L3 Technologies, Inc. (LLL:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 20.8x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about losses in their Traveling Wave Tube business, restructuring activities, and their ability to improve operating margin.Specifically, management may be concerned about losses and margin drag from their Traveling Wave Tube business, and their ability to reduce their inventory build. In addition, they may be concerned about their compensation metrics' new focus on organic growth, and may lack confidence in their ability to sustain organic sales and operating income growth. Moreover, they may be exaggerating the progress of their night-vision goggles development and production, and may be downplaying concerns about night-vision competition, their Vertex service business divestiture, and sector consolidation. Furthermore, they may lack confidence in their ability to drive margin and working capital improvements, continue increasing their dividend, and sustain positive book-to-bill ratios across their sectors.
L3 Technologies is a defense technology company. The company's segments include: Intelligence, Surveillance and Reconnaissance systems, which provides engineering, modernization and sustainment solutions for military and various government aircraft, ground support equipment and other platforms; Communications and Networked Systems, which provides network and communication systems, communications products, radio frequency components, satellite communication terminals and space, microwave and telemetry products; and Electronic Systems, which provides a range of products and services, including components, products, subsystems, systems and related services to military and commercial customers.
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