L3Harris (LHX) Q4 Earnings Beat, Revenues Increase Y/Y
L3Harris Technologies, Inc. LHX reported fourth-quarter 2023 adjusted earnings (from continuing operations) of $3.35 per share, which beat the Zacks Consensus Estimate of $3.31 by 1.2%. The bottom line also increased 2% from the year-ago quarter’s reported figure.
Excluding one-time items, the company reported GAAP earnings of 83 cents per share, down from $2.17 generated in the prior-year period.
L3Harris generated 2023 adjusted earnings of $12.36 per share, which beat the Zacks Consensus Estimate of $12.35 by a tad. However, the bottom line decreased 4% from the year-ago quarter’s reported figure.
L3Harris Technologies Inc Price, Consensus and EPS Surprise
L3Harris Technologies Inc price-consensus-eps-surprise-chart | L3Harris Technologies Inc Quote
Total Revenues
L3Harris’ fourth-quarter revenues totaled $5,340 million, which beat the Zacks Consensus Estimate of $5,288 million by 0.9%. The figure also rose 17% from the year-ago quarter’s level of $4,578 million.
The year-over-year top-line improvement can be attributed to the acquisitions of Aerojet Rocketdyne and Tactical Data Links (“TDL”).
The company’s 2023 revenues totaled $19.42 billion, which beat the Zacks Consensus Estimate of $19.36 billion by 0.3%. The figure also rose 14% from the year-ago quarter’s level of $17.06 billion.
Segmental Performance
Integrated Mission Systems: The segment recorded net revenues of $1,627 million, down 6% year over year. This was on account of lower Intelligence, Surveillance and Reconnaissance (ISR) aircraft missionization efforts.
This segment recorded an operating loss of $75 million against an operating income of $179 million in the fourth quarter of 2022.
Space and Airborne Systems: Net revenues from the segment were $1,800 million, up 6% year over year. This upside was largely driven by growth from Space, Mission Networks and Intel and Cyber units.
Operating income declined to $191 million from $193 million reported in the year-ago quarter. The operating margin contracted 70 basis points (bps) to 10.6%, owing to lower margin space revenues.
Communication Systems: Net revenues from this segment increased 14% to $1,363 million, backed by a higher volume of night-vision products. Benefits from the acquisition of TDL also contributed to this segment’s revenues.
Operating income improved to $356 million from $297 million reported in the year-ago quarter. The operating margin improved 120 bps to 26.1%, driven by the acquisition of TDL and efficiencies realized from higher volume.
Aerojet Rocketdyne: This segment reported revenues of $597 million and an operating income of $66 million in the fourth quarter of 2023.
Financial Position
As of Dec 29, 2023, L3Harris had $560 million in cash and cash equivalents compared with $880 million as of Dec 30, 2022.
The long-term debt as of Dec 29, 2023, was $11,160 million compared with $6,225 million as of Dec 30, 2022.
The net cash inflow from operating activities amounted to $2,096 million during 2023 compared with $2,158 million in the prior year.
At the end of 2023, L3Harris generated free cash flow worth $2,009 million compared with $2,029 at the end of 2022.
2024 Guidance
L3Harris announced its 2024 guidance. It expects to generate revenues in the range of $20.70-$21.30 billion. The Zacks Consensus Estimate for revenues is pegged at $21.40 billion, higher than the company’s guided range.
LHX projects 2024 adjusted earnings in the range of $12.40-$12.80 per share. The Zacks Consensus Estimate for the same is pegged at $13.02 per share, higher than the projected range.
LHX expects to generate approximately $2.2 billion in adjusted free cash flow.
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 Q4 Defense Releases
Lockheed Martin Corporation LMT reported fourth-quarter 2023 adjusted earnings of $7.90 per share, which beat the Zacks Consensus Estimate of $7.26 by 8.8%. The bottom line also improved 1.4% from the year-ago quarter's recorded figure.
The company’s net sales were $18.87 billion, which surpassed the Zacks Consensus Estimate of $17.98 billion by 4.9%. The top line, however, decreased 0.6% from $18.99 billion reported in the year-ago quarter.
RTX Corporation’s RTX fourth-quarter 2023 adjusted earnings per share (EPS) of $1.29 beat the Zacks Consensus Estimate of $1.25 by 3.2%. The bottom line also improved 1.6% from the year-ago quarter’s level of $1.27.
RTX’s fourth-quarter adjusted sales totaled $19,824 million. The company reported GAAP sales of $19,927 million compared with $18,093 million in the fourth quarter of 2022.
Textron Inc. TXT reported fourth-quarter 2023 adjusted earnings of $1.60 per share, which surpassed the Zacks Consensus Estimate of $1.53 by 4.6%. The bottom line also improved 30.1% from the year-ago quarter’s recorded figure.
The company reported total revenues of $3,892 million, which missed the Zacks Consensus Estimate of $3,917.6 million by 0.7%. However, the reported figure increased 7% from the year-ago quarter’s level of $3,636 million.
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L3Harris Technologies Inc (LHX) : Free Stock Analysis Report
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