Defense contractor L-3 Communications Holdings Inc. LLL posted first-quarter 2016 adjusted earnings of $2.08 per share, beating the Zacks Consensus Estimate of $1.57 by 32.5%. Earnings were also higher than the year-ago figure of $1.43 by 45.5% owing to operating margin expansion.Total RevenueTotal revenue of $2,353 million in the quarter surpassed the Zacks Consensus Estimate of $2,339 million by 0.6%. Revenues were, however, down 5% year over year related to business divestitures.Organic sales to the U.S. government increased 4% and to international and commercial customers declined 14% in the reported quarter. Overall, organic sales declined 2.1% in the first quarter.Orders & MarginFunded orders in the reported quarter were $2.6 billion, almost flat with the year-ago quarter. Funded backlog was $8.7 billion, as of Mar 25, 2016, up 3% from $8.4 billion as of Dec 31, 2015.Operating margin expanded 320 basis points year over year in the quarter.Segment PerformanceAerospace Systems: Net sales at the segment decreased 2% to $1,005 million from the prior-year figure of $1,026 million mainly on account of lower sales at ISR Systems.Electronic Systems: The segment recorded net sales of $877 million in the reported quarter, down 13.8% year over year. The decrease mainly reflects the divestitures of MSI, lower sales at Power & Propulsion System, Warrior Systems and Sensor Systems.Communication Systems: Net sales at the segment increased 5.8% year over year to $271 million, primarily due to growth in Broadband Communication Systems, Tactical Satellite Communications products, business acquisitions and Advanced Communications products.Financial PositionAs of Mar 25, 2016, L-3 Communications had $534 million in cash and cash equivalents compared with $207 million as of Dec 31, 2015.Long-term debt, as of Mar 25, 2016, was $3,127 million, compared with $3,125 million as of Dec 31, 2015.Net cash from operating activities was $112 million in the first quarter, flat year over year. Capital expenditure was $35 million compared with $40 million in the year-ago period.GuidanceThe company reiterated its revenue forecast for 2016 in the $9,950−$10,150 million band.The adjusted earnings per share guidance was raised to the range of $7.55 to $7.75 from the prior projection of $7.40 to $7.60.Interest expenses for 2016 are still expected to be $162 million, and segment operating margin is expected to be 9.8%. The capital expenditure forecast was also reaffirmed at $205 million. Additionally, the company expects to generate $825 million of free cash flow.Peer ReviewPentagon’s prime contractor, Lockheed Martin Corp. LMT, reported adjusted first-quarter 2016 earnings of $2.58 per share, surpassing the Zacks Consensus Estimate of $2.51 by 2.8%.Northrop Grumman NOC reported first-quarter 2016 adjusted earnings of $2.77 per share, beating the Zacks Consensus Estimate of $2.47 by 12.1%. Earnings also increased 29.4% from $2.14 per share in the year-ago quarter on higher sales volume.General Dynamics Corporation GD announced first-quarter 2016 earnings from continuing operations of $2.34 per share, comfortably surpassing the Zacks Consensus Estimate and the year-ago figure of $2.14 by 9.3%.Zacks RankL-3 Communications currently has a Zacks Rank #4 (Sell).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NORTHROP GRUMMN (NOC): Free Stock Analysis Report GENL DYNAMICS (GD): Free Stock Analysis Report LOCKHEED MARTIN (LMT): Free Stock Analysis Report L-3 COMM HLDGS (LLL): Free Stock Analysis Report To read this article on Zacks.com click here.