Exelis (XLS), a diversified global aerospace, defense, information and services company, has recorded a 21.79 percent fall in profit for the quarter ended Jun. 30, 2014.

The company earned $61 million or $0.32 a share in the second-quarter compared with $78 million or $0.41 a share a year ago. Adjusted earnings per share met the analysts' expectation of $0.34.

Revenue during the second-quarter slipped 10.71 percent to $1,117 million from $1,251 million in the last year period.

Gross margin contracted by 119 basis points over the previous year period to 20.95 percent. Total expenses as a percentage of revenues increased to 90.78 percent from 89.85 percent in the same period last year. That has resulted in contraction of 93 basis points in operating margins to 9.22 percent.

The company disclosed operating income of $103 million, compared with $127 million in the last year period.

''New business, which included contracts in several of our strategic growth platforms, remained strong in the second quarter and we continue to work toward the spin-off of Mission Systems, which we expect to complete later this summer or early fall,'' said Exelis CEO and president David F. Melcher. ''While encouraged by our business performance, we continue to see significant contraction in our Afghanistan programs, and as a result, we are adjusting our full-year expectations to account for this trend.''

For full-year, the company expects adjusted earnings per share at $1.44 - $1.50 for full-year.

Cash Flow

Exelis has generated cash of $22 million from operating activities during the first half, down 50 percent or $22 million when compared with the last year period. The company has generated 1.02 cents of operating cash flow in every sales dollar for the first half, down from 1.81 cents in the same period last year.

The company has spent $21 million cash to meet investing activities during the first half, as against cash outgo of $44 million in the last year period. It has made net capital expenditure of $15 million during the first half, which was lower by 44.44 percent or $12 million, from a year ago.

The company's free cash flow accounted for 31.82 percent of operating cash flow for the first half, compared with 38.64 percent in the last year period.

The company has spent $80 million cash to meet financing activities during the first half, as against cash outgo of $24 million in the last year period. It has spent net of $38 million on repurchase of common stocks.

The company's cash dividend payment increased $21 million to $40 million. Dividend payment accounted for 181.82 percent of operating cash flow for the first half, compared with 43.18 percent in the same period previous year.

As on Jun. 30, 2014, the company's cash balance stood at $394 million, up 52.12 percent or $135 million from Jun. 30, 2013.

Working Capital

Exelis has witnessed an increase in the working capital over the last one year. The company's working capital stood at $726 million as at Jun. 30, 2014, up $177 million or 32.24 percent from $549 million on Jun. 30, 2013. It registered an increase in current ratio to 1.76 as at Jun. 30, 2014 from 1.47 on Jun. 30, 2013.

Debt Position

As on Jun. 30, 2014, long-term debt stood at $649 million. The company's total debt was 13.61 percent of total assets as on Jun. 30, 2014, compared with 12.68 percent on Jun. 30, 2013.

Shares of the company declined $0.19 or 1.12 percent to settle at $16.84 on Thursday.