The Electro Optic Systems Hldg Ltd (ASX: EOS) share price has climbed into the green after the company released its quarterly results.
Electro Optic Systems shares are now exchanging hands at $4.55 a piece, a 9% jump from the market open.
Let’s take a look at the results in closer detail.
Quick recap on Electro Optic Systems
Electro Optic Systems produces ‘electro-optic’ technologies for the aerospace and defence markets.
These technologies involve components that incorporate light and materials, such as in lasers and LEDs.
Electro Optic also has exposure in the communications sector but derives most of its revenue from defence.
The company’s market cap is $688 million at the time of writing.
Electro Optic’s quarterly results
The company realised total cash receipts of $65.5 million this quarter.
A total of $30 million came from an overseas contract with Diehl Defence. Electro expects “a further $100 million from this business in H2 2021”.
Diehl is a privately-owned German defence company. The agreement will see Electro expand its footprint into the European and NATO markets.
Electro also booked “record revenues” from communications of $13.8 million, well up from $8 million at the same time last year.
It explained there is “more than 12 months of work in hand” from an order backlog in this segment.
The company mentioned its Australian staff in the update:
During the quarter, the EM Solutions team in The Netherlands, supported remotely by staff in Australia, successfully fitted the first of ten Cobra antenna systems to a European Navy vessel.
Additional take aways
Electro also made progress on its Counter-UAS (now Titanis) C4 Edge and T2000 programs.
Titanis focuses on drone-defeating technology. The company issued a promotional video for the product launch event held at Land Forces 2021 back in June.
The C4 Edge program was extended to include applied virtual simulation and ‘APC Technology’. The inclusion will be integrated in the Australian Army’s virtual reality training platforms.
Electro also gave some 2021 guidance and expectations. It sees revenue of $235 million – $245 million for 2021, which equates to growth of 30% year on year.
It also expects underlying earnings before interest and tax (EBIT) to be $20 million – $25 million, gross of “Spacelink costs”.
When factoring in these costs, underlying EBIT is “expected to be $3 million – $8 million after expenses of $17 million”.
Electro Optic share price snapshot
The Electro Optic share price has spent 2021 in the red, posting a loss of 22% since January.
This year’s loss extends the 12 month loss to 28%.
Electro is lagging the S&P/ASX 200 Index (ASX: XJO), which is up 10.5% in 2021 and 21% for the past 12 months.