CLIFTON, N.J. (AP) -- Exelis Inc. reported a drop-off in both profits and revenue that was steeper than Wall Street had anticipated, largely due to cutbacks in military spending.
The former defense unit of manufacturer ITT Corp., however, stuck by its 2013 revenue and profit guidance and company shares jumped 4 percent.
Defense contractors have wrestled with cuts in military spending in the U.S. and Europe, and have cut jobs to offset the loss of contracts.
Net income at Exelis fell 37 percent to $44 million, or 23 cents per share, for the quarter that ended March 31. That' s down from $70 million, or 37 cents per share, during the same period last year.
Revenue fell 17 percent to $1.19 billion, from $1.42 billion a year earlier.
Analysts surveyed by FactSet had been expecting a profit of 27 cents per share on revenue of $1.21 billion.
The company absorbed $49 million in restructuring charges as it trims its payroll.
Earnings in its electronics division fell from $91 million a year ago to $19 million in the most recent quarter. Revenue fell 24 percent as sales declined for night vision and counter-explosives products. Overseas demand for airborne electronic warfare equipment rose.
Earnings in its information and technical services unit rose 17 percent to $55 million because of productivity improvements, even as revenue fell 11 percent to $686 million.
The company reaffirmed its 2013 revenue guidance of $5 billion to $5.1 billion, and earnings per share of $1.45 to $1.55. Analysts had been expecting a profit of $1.54 per share on $5.02 billion.
Shares rose 45 cents to $11.39 in morning trading.