FLIR Systems Q1 profit beats Street, shares rise

BANGALORE (Reuters) - FLIR Systems Inc (FLIR.O), which makes thermal-imaging products and infra-red cameras, reported a better-than-expected quarterly profit, helped mainly by strong sales at its government systems division, and reaffirmed its 2009 outlook, sending its shares up 14 percent.

For 2009, the company still sees earnings of $1.40 to $1.47 a share, on revenue of $1.20 billion to $1.25 billion.

Analysts on average were expecting earnings of $1.44 a share, before special items, on revenue of $1.24 billion, according to Reuters Estimates.

FLIR, which experienced weak demand in the United States, said its Asian and Western Europe markets were strong during the first quarter.

The growth in these international markets will help offset the slowdown in the domestic market for FLIR, analyst Antonio Antezano of Macquarie Research said.

The company said it ended the quarter with $327 million in cash.

"Economic conditions and government order activity in the second quarter will be important factors in our performance for the remainder of 2009 and into 2010," Chief Executive Earl Lewis said in a statement.

FLIR's government systems segment makes imaging products for the military and accounts for about half of its overall revenue.

"I do not think the growth rate that the company has been showing in recent years can be maintained," Antezano said, adding that he sees strong demand for surveillance products over the next five years.

The analyst sees a low single-digit growth for FLIR in 2010.

For the first quarter, FLIR reported net income of $54.3 million, or 35 cents a share, compared with $36.5 million, or 24 cents a share, a year ago.

Revenue rose 15 percent to $272.0 million.

Analysts on average were expecting earnings of 30 cents a share, before special items, on revenue of $276.5 million.

Revenue from the government systems division rose 43 percent to $162.2 million, driven by strength in airborne applications.

Sales at the commercial vision systems division rose 5 percent to $45.9 million, reflecting growth in the security and surveillance and cores and components markets.

The commercial vision systems division, which accounts about 15 percent of FLIR's total sales, is the business with the highest growth potential, Antezano said.

The analyst, who has an "outperform" rating on the stock, said the company's expansion into newer areas, such as the building market, is shaping up well.

The building market includes building diagnostics, energy auditing and facility management.

Shares of the company rose $3 to $25.18 in afternoon trade on Nasdaq. They touched a high of $25.36 earlier in the session.

(Editing by Vinu Pilakkott and Deepak Kannan)