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L3Harris Technologies (LHX) Q3 Earnings Top, Revenues Drop Y/Y
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L3Harris Technologies, Inc.’s (LHX - Free Report) third-quarter 2021 adjusted earnings came in at $3.21 per share, which surpassed the Zacks Consensus Estimate of $3.16 by 1.6%. The bottom line also increased 13% from the year-ago quarter’s $2.84.
Including one-time items, the company reported GAAP earnings of $2.39 per share compared with the year-ago quarter’s $1.99.
This year-over-year upside in earnings was driven by e3 performance, integration benefits, cost management, and a lower share count, along with lower acquisition-related amortization, net of supply chain impacts.
Total Revenues
During the reported quarter, the company’s revenues came in at $4,229 million, lagging the Zacks Consensus Estimate of $4,510 million by 6.2%. Moreover, revenues dropped 5% on a year-over-year basis, owing to strategic divestitures, ISR aircraft award timing in Integrated Mission Systems, and supply chain-related constraints within Communication Systems.
L3Harris Technologies Inc Price, Consensus and EPS Surprise
Integrated Mission Systems: Net sales at the segment came in at $1,336 million, down 3% due to the timing of aircraft awards in ISR and product deliveries in Electro Optical.
Operating income came in at $222 million, up from the year-ago quarter’s $213 million. Moreover, the operating margin expanded 110 basis points (bps) to 16.6%.
Space and Airborne Systems: The segment recorded net sales of $1,284 million in the third quarter, up 3% year over year. This upside resulted from the ramp-up of missile defense and other responsive programs.
Operating income increased to $242 million from $231 million registered in the year-ago quarter. The operating margin expanded 30 bps to 18.8%.
Communication Systems: Net sales at the segment went down 6% to $1,030 million. This year-over-year decline was on account of product delivery delays from supply chain-related constraints mainly within Tactical Communications, lower volume on legacy unmanned platforms in Broadband Communications, delivery timing within Integrated Vision Solutions, and contract roll-offs in Global Communications Solutions.
Operating income decreased to $271 million from the year-ago quarter’s $273 million. The operating margin however expanded 130 bps to 26.3%.
Aviation Systems: Net sales at the segment came in at $625 million, down 21% year over year. This decline was due to the divestitures of the Military Training and Combat Propulsion Systems businesses.
Operating income decreased to $90 million from $100 million in the year-ago quarter. The operating margin expanded 180 bps to 14.4%.
Financial Position
As of Oct 1, 2021, L3Harris had $1,126 million in cash and cash equivalents compared with $1,276 million as of Jan 1, 2021.
Long-term debt as of Oct 1, 2021 was $7,053 million compared with $6,943 million as of Jan 1, 2021.
Net cash inflow from operating activities amounted to $1,865 million at the end of third-quarter 2021 compared with the year-ago cash inflow of $2,092 million.
During the first nine months of 2021, L3Harris generated $1,988 million in adjusted free cash flow and returned $3,493 million to shareholders through $2,875 million in share repurchases and $618 million in dividends.
2021 View
L3Harris currently expects to generate revenues of $17.9 billion in 2021, lower than the prior guidance range of $18.1-$18.5 billion. The Zacks Consensus Estimate for revenues, pegged at $18.45 billion, lies above the company’s new guidance.
The company’s 2021 adjusted earnings are now projected to be in the range of $12.85-$13.00 per share, narrower than the earlier guidance range of $12.80-$13.00. The Zacks Consensus Estimate for EPS, pegged at $13.02, lies above the guided range.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2021 adjusted earnings of 13 cents per share, which exceeded the Zacks Consensus Estimate of 8 cents by 62.5%.
Raytheon Technologies Corporation’s (RTX - Free Report) third-quarter 2021 adjusted earnings per share (EPS) of $1.26 outpaced the Zacks Consensus Estimate of $1.07 by 17.8%.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2021 adjusted earnings of $6.66 per share, which surpassed the Zacks Consensus Estimate of $1.96 by a whopping 239.8%.
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L3Harris Technologies (LHX) Q3 Earnings Top, Revenues Drop Y/Y
L3Harris Technologies, Inc.’s (LHX - Free Report) third-quarter 2021 adjusted earnings came in at $3.21 per share, which surpassed the Zacks Consensus Estimate of $3.16 by 1.6%. The bottom line also increased 13% from the year-ago quarter’s $2.84.
Including one-time items, the company reported GAAP earnings of $2.39 per share compared with the year-ago quarter’s $1.99.
This year-over-year upside in earnings was driven by e3 performance, integration benefits, cost management, and a lower share count, along with lower acquisition-related amortization, net of supply chain impacts.
Total Revenues
During the reported quarter, the company’s revenues came in at $4,229 million, lagging the Zacks Consensus Estimate of $4,510 million by 6.2%. Moreover, revenues dropped 5% on a year-over-year basis, owing to strategic divestitures, ISR aircraft award timing in Integrated Mission Systems, and supply chain-related constraints within Communication Systems.
L3Harris Technologies Inc Price, Consensus and EPS Surprise
L3Harris Technologies Inc price-consensus-eps-surprise-chart | L3Harris Technologies Inc Quote
Segmental Performance
Integrated Mission Systems: Net sales at the segment came in at $1,336 million, down 3% due to the timing of aircraft awards in ISR and product deliveries in Electro Optical.
Operating income came in at $222 million, up from the year-ago quarter’s $213 million. Moreover, the operating margin expanded 110 basis points (bps) to 16.6%.
Space and Airborne Systems: The segment recorded net sales of $1,284 million in the third quarter, up 3% year over year. This upside resulted from the ramp-up of missile defense and other responsive programs.
Operating income increased to $242 million from $231 million registered in the year-ago quarter. The operating margin expanded 30 bps to 18.8%.
Communication Systems: Net sales at the segment went down 6% to $1,030 million. This year-over-year decline was on account of product delivery delays from supply chain-related constraints mainly within Tactical Communications, lower volume on legacy unmanned platforms in Broadband Communications, delivery timing within Integrated Vision Solutions, and contract roll-offs in Global Communications Solutions.
Operating income decreased to $271 million from the year-ago quarter’s $273 million. The operating margin however expanded 130 bps to 26.3%.
Aviation Systems: Net sales at the segment came in at $625 million, down 21% year over year. This decline was due to the divestitures of the Military Training and Combat Propulsion Systems businesses.
Operating income decreased to $90 million from $100 million in the year-ago quarter. The operating margin expanded 180 bps to 14.4%.
Financial Position
As of Oct 1, 2021, L3Harris had $1,126 million in cash and cash equivalents compared with $1,276 million as of Jan 1, 2021.
Long-term debt as of Oct 1, 2021 was $7,053 million compared with $6,943 million as of Jan 1, 2021.
Net cash inflow from operating activities amounted to $1,865 million at the end of third-quarter 2021 compared with the year-ago cash inflow of $2,092 million.
During the first nine months of 2021, L3Harris generated $1,988 million in adjusted free cash flow and returned $3,493 million to shareholders through $2,875 million in share repurchases and $618 million in dividends.
2021 View
L3Harris currently expects to generate revenues of $17.9 billion in 2021, lower than the prior guidance range of $18.1-$18.5 billion. The Zacks Consensus Estimate for revenues, pegged at $18.45 billion, lies above the company’s new guidance.
The company’s 2021 adjusted earnings are now projected to be in the range of $12.85-$13.00 per share, narrower than the earlier guidance range of $12.80-$13.00. The Zacks Consensus Estimate for EPS, pegged at $13.02, lies above the guided range.
Zacks Rank
L3Harris currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Hexcel Corporation (HXL - Free Report) reported third-quarter 2021 adjusted earnings of 13 cents per share, which exceeded the Zacks Consensus Estimate of 8 cents by 62.5%.
Raytheon Technologies Corporation’s (RTX - Free Report) third-quarter 2021 adjusted earnings per share (EPS) of $1.26 outpaced the Zacks Consensus Estimate of $1.07 by 17.8%.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2021 adjusted earnings of $6.66 per share, which surpassed the Zacks Consensus Estimate of $1.96 by a whopping 239.8%.