Ammunition sales spur Alliant profit

Updated: August 8, 2008 - 12:11 AM

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Alliant Techsystems Inc., the largest maker of rounds for the M-16 rifles used by the Army in Iraq, said first-quarter earnings rose 10 percent on higher sales of military as well as commercial ammunition.

The company said it will buy back as much as 15 percent of its stock after net income climbed to $57.9 million, or $1.64 a share, from $52.4 million, or $1.50 a share, a year earlier. The earnings missed analysts' average estimate because of costs of 27 cents a share for delayed satellite work. Sales rose 17 percent, to $1.12 billion.

Alliant, based in Eden Prairie, has quadrupled output of small-caliber ammunition since 2000, as the war in Iraq increased demand for combat and training use.

Chief Executive Daniel Murphy anticipates that such revenue will slow, and he has expanded sales of satellite components and rockets.

"While [Alliant's] reported results slightly missed expectations, they still saw strong organic growth of 12 percent in the quarter and were able to tweak guidance to the top of the range despite absorbing a 27-cent charge, which we find encouraging," Rob Stallard, an analyst with Macquarie Research Equities in New York, wrote in a report to clients.

The average of 10 analysts' estimates compiled by Bloomberg for the quarter ended June 29 was for $1.66 a share. On average, analysts projected sales would increase to $1.05 billion, from $958.4 million.

Shares of Alliant rose 55 cents Thursday, or 0.5 percent, to close at $101.99.

Alliant now forecasts 2009 earnings of $7.25 to $7.35 a share. The low end is 10 cents a share more than the company's May profit forecast, while the top is unchanged.

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