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L3Harris Technologies, Inc. (LHX - Free Report) reported second-quarter 2024 adjusted earnings (from continuing operations) of $3.24 per share, which beat the Zacks Consensus Estimate of $3.18 by 1.9%. The bottom line also increased 9.1% from the year-ago quarter’s reported figure of $2.97.
Excluding one-time items, the company reported GAAP earnings of $1.92 per share, up from $1.83 generated in the prior-year period.
The year-over-year improvement in the bottom line can be attributed to solid sales growth.
Total Revenues
L3Harris’ second-quarter revenues totaled $5.30 billion, which missed the Zacks Consensus Estimate by 0.1%. However, the top line rose 13% from the year-ago quarter’s level of $4.69 billion.
L3Harris Technologies Inc Price, Consensus and EPS Surprise
The year-over-year top-line improvement can be attributed to the acquisition of Aerojet Rocketdyne and growth from Space Systems and classified Intel & Cyber programs from the Space & Airborne Systems segment. Organic growth from increased demand for tactical and broadband communication products from the Communication Systems segment also contributed to overall revenue growth.
Segmental Performance
Integrated Mission Systems: The segment recorded net revenues of $1.73 billion, almost flat year over year. This was due to lower volumes from its Commercial Aviation business being offset by higher volumes from Maritime programs.
This segment recorded an operating income of $206 million compared with the operating income of $162 million in the second quarter of 2023. The segment’s operating margin expanded 260 basis points (bps) to 11.9%, driven by the improved program performance.
Space and Airborne Systems: Net revenues from the segment were $1.71 billion compared with $1.72 billion generated in the second quarter of 2023. Continued growth in Space Systems and classified program growth in Intel and Cyber within this segment were neutralized by lower volumes from the Airborne Combat Systems business and lower revenues from the divestiture of the antenna business.
The segment’s operating income improved to $215 million from $168 million reported in the year-ago quarter. The operating margin expanded 280 bps to 12.6%, driven by improved operational and program performance as well as the absence of a non-cash charge incurred in the second quarter of 2023.
Communication Systems: Net revenues from this segment increased 4.4% to $1.35 billion. This increase was driven by higher volumes from Broadband Communications and increased Department of Defense sales in Tactical Communications.
The unit’s operating income improved to $329 million from $325 million reported in the year-ago quarter. The operating margin deteriorated 80 bps to 24.4% due to a higher domestic tactical radio mix and the unfavorable timing of software sales.
Aerojet Rocketdyne: This segment reported revenues of $581 million and an operating income of $75 million in the second quarter of 2024.
Financial Position
As of Jun 28, 2024, L3Harris had $547 million in cash and cash equivalents compared with $560 million as of Dec 29, 2023.
The long-term debt as of Jun 28, 2024 was $10.53 billion compared with $11.16 billion as of Dec 29, 2023.
The net cash flow from operating activities amounted to $650 million during the first six months of 2024 compared to the net cash flow from operating activities worth $764 million generated in the prior-year period.
At the end of the second quarter of 2024, L3Harris’ adjusted free cash flow came in at $558 million compared to the free cash flow worth $656 million at the end of the second quarter of 2023.
2024 Guidance
L3Harris partially updated its 2024 guidance. It now expects to generate revenues in the range of $21.00-$21.30 billion, wider than its earlier guidance range of $20.80-$21.30 billion. The Zacks Consensus Estimate for LHX’s revenues is pegged at $21.25 billion, higher than the midpoint of the company’s guided range.
L3Harris increased its 2024 adjusted earnings guidance to the range of $12.85-$13.15 per share from the prior guidance range of $12.70-$13.05. The Zacks Consensus Estimate for the same is pegged at $12.99 per share, which lies just below than the midpoint of the company’s updated guidance range.
LHX still expects to generate approximately adjusted free cash flow worth $2.2 billion.
Teledyne Technologies Inc. (TDY - Free Report) reported second-quarter 2024 adjusted earnings of $4.58 per share, which surpassed the Zacks Consensus Estimate of $4.49 by 2%. However, the bottom line declined 1.9% from $4.67 recorded in the year-ago quarter.
Total sales were $1.37 billion, which missed the Zacks Consensus Estimate of $1.38 billion by 0.2%. The top line also dropped 3.6% from $1.42 billion reported in the year-ago quarter.
Lockheed Martin Corporation (LMT - Free Report) reported second-quarter 2024 adjusted earnings of $7.11 per share, which beat the Zacks Consensus Estimate of $6.45 by 10.2%. The bottom line also improved 5.6% from the year-ago quarter's recorded figure of $6.73.
Net sales were $18.12 billion, which surpassed the Zacks Consensus Estimate of $17.10 billion by 6%. The top line also increased 8.6% from $16.69 billion reported in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2024 adjusted earnings of $1.54 per share, which surpassed the Zacks Consensus Estimate of $1.49 by 3.4%. The bottom line also improved 5.5% from the year-ago quarter’s figure of $1.46 per share.
TXT reported total revenues of $3.53 billion, which missed the Zacks Consensus Estimate of $3.55 billion by 0.6%. However, the reported figure increased 3% from the year-ago quarter’s level of $3.42 billion.
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L3Harris (LHX) Beats Q2 Earnings Estimates, Hikes '24 EPS View
L3Harris Technologies, Inc. (LHX - Free Report) reported second-quarter 2024 adjusted earnings (from continuing operations) of $3.24 per share, which beat the Zacks Consensus Estimate of $3.18 by 1.9%. The bottom line also increased 9.1% from the year-ago quarter’s reported figure of $2.97.
Excluding one-time items, the company reported GAAP earnings of $1.92 per share, up from $1.83 generated in the prior-year period.
The year-over-year improvement in the bottom line can be attributed to solid sales growth.
Total Revenues
L3Harris’ second-quarter revenues totaled $5.30 billion, which missed the Zacks Consensus Estimate by 0.1%. However, the top line rose 13% from the year-ago quarter’s level of $4.69 billion.
L3Harris Technologies Inc Price, Consensus and EPS Surprise
L3Harris Technologies Inc price-consensus-eps-surprise-chart | L3Harris Technologies Inc Quote
The year-over-year top-line improvement can be attributed to the acquisition of Aerojet Rocketdyne and growth from Space Systems and classified Intel & Cyber programs from the Space & Airborne Systems segment. Organic growth from increased demand for tactical and broadband communication products from the Communication Systems segment also contributed to overall revenue growth.
Segmental Performance
Integrated Mission Systems: The segment recorded net revenues of $1.73 billion, almost flat year over year. This was due to lower volumes from its Commercial Aviation business being offset by higher volumes from Maritime programs.
This segment recorded an operating income of $206 million compared with the operating income of $162 million in the second quarter of 2023. The segment’s operating margin expanded 260 basis points (bps) to 11.9%, driven by the improved program performance.
Space and Airborne Systems: Net revenues from the segment were $1.71 billion compared with $1.72 billion generated in the second quarter of 2023. Continued growth in Space Systems and classified program growth in Intel and Cyber within this segment were neutralized by lower volumes from the Airborne Combat Systems business and lower revenues from the divestiture of the antenna business.
The segment’s operating income improved to $215 million from $168 million reported in the year-ago quarter. The operating margin expanded 280 bps to 12.6%, driven by improved operational and program performance as well as the absence of a non-cash charge incurred in the second quarter of 2023.
Communication Systems: Net revenues from this segment increased 4.4% to $1.35 billion. This increase was driven by higher volumes from Broadband Communications and increased Department of Defense sales in Tactical Communications.
The unit’s operating income improved to $329 million from $325 million reported in the year-ago quarter. The operating margin deteriorated 80 bps to 24.4% due to a higher domestic tactical radio mix and the unfavorable timing of software sales.
Aerojet Rocketdyne: This segment reported revenues of $581 million and an operating income of $75 million in the second quarter of 2024.
Financial Position
As of Jun 28, 2024, L3Harris had $547 million in cash and cash equivalents compared with $560 million as of Dec 29, 2023.
The long-term debt as of Jun 28, 2024 was $10.53 billion compared with $11.16 billion as of Dec 29, 2023.
The net cash flow from operating activities amounted to $650 million during the first six months of 2024 compared to the net cash flow from operating activities worth $764 million generated in the prior-year period.
At the end of the second quarter of 2024, L3Harris’ adjusted free cash flow came in at $558 million compared to the free cash flow worth $656 million at the end of the second quarter of 2023.
2024 Guidance
L3Harris partially updated its 2024 guidance. It now expects to generate revenues in the range of $21.00-$21.30 billion, wider than its earlier guidance range of $20.80-$21.30 billion. The Zacks Consensus Estimate for LHX’s revenues is pegged at $21.25 billion, higher than the midpoint of the company’s guided range.
L3Harris increased its 2024 adjusted earnings guidance to the range of $12.85-$13.15 per share from the prior guidance range of $12.70-$13.05. The Zacks Consensus Estimate for the same is pegged at $12.99 per share, which lies just below than the midpoint of the company’s updated guidance range.
LHX still expects to generate approximately adjusted free cash flow worth $2.2 billion.
Zacks Rank
L3Harris currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Teledyne Technologies Inc. (TDY - Free Report) reported second-quarter 2024 adjusted earnings of $4.58 per share, which surpassed the Zacks Consensus Estimate of $4.49 by 2%. However, the bottom line declined 1.9% from $4.67 recorded in the year-ago quarter.
Total sales were $1.37 billion, which missed the Zacks Consensus Estimate of $1.38 billion by 0.2%. The top line also dropped 3.6% from $1.42 billion reported in the year-ago quarter.
Lockheed Martin Corporation (LMT - Free Report) reported second-quarter 2024 adjusted earnings of $7.11 per share, which beat the Zacks Consensus Estimate of $6.45 by 10.2%. The bottom line also improved 5.6% from the year-ago quarter's recorded figure of $6.73.
Net sales were $18.12 billion, which surpassed the Zacks Consensus Estimate of $17.10 billion by 6%. The top line also increased 8.6% from $16.69 billion reported in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2024 adjusted earnings of $1.54 per share, which surpassed the Zacks Consensus Estimate of $1.49 by 3.4%. The bottom line also improved 5.5% from the year-ago quarter’s figure of $1.46 per share.
TXT reported total revenues of $3.53 billion, which missed the Zacks Consensus Estimate of $3.55 billion by 0.6%. However, the reported figure increased 3% from the year-ago quarter’s level of $3.42 billion.