L3Harris Technologies Reports Strong Third Quarter 2024 Results, Increases 2024 Guidance
L3Harris Technologies (NYSE: LHX) reported strong Q3 2024 results with revenue of $5.3 billion, up 8% year-over-year, and 5% organic growth. The company achieved a book-to-bill ratio of 1.4x with orders of $7.2 billion. Diluted EPS increased 4% to $2.10, while non-GAAP diluted EPS rose 5% to $3.34.
The company increased its 2024 guidance, projecting revenue of $21.1B - $21.3B, adjusted segment operating margin of ~15.5%, and non-GAAP diluted EPS of $12.95 - $13.15. L3Harris also raised its cost savings target from $400 million to at least $600 million for 2024, expecting to reach the $1 billion target a year early.
L3Harris Technologies (NYSE: LHX) ha riportato risultati solidi per il terzo trimestre del 2024, con un fatturato di $5,3 miliardi, in aumento dell'8% rispetto all'anno precedente, e una crescita organica del 5%. L'azienda ha raggiunto un rapporto ordini-fatturato di 1,4x con ordini pari a $7,2 miliardi. L'utile per azione diluito è aumentato del 4% raggiungendo $2,10, mentre l'utile per azione diluito non-GAAP è salito del 5% a $3,34.
L'azienda ha migliorato le sue previsioni per il 2024, prevedendo un fatturato compreso tra $21,1 miliardi e $21,3 miliardi, un margine operativo rettificato del segmento di circa il 15,5% e un utile per azione diluito non-GAAP tra $12,95 e $13,15. L3Harris ha anche innalzato il suo obiettivo di risparmi sui costi da $400 milioni ad almeno $600 milioni per il 2024, prevedendo di raggiungere l'obiettivo di $1 miliardo con un anno di anticipo.
L3Harris Technologies (NYSE: LHX) reportó resultados sólidos para el tercer trimestre de 2024, con ingresos de $5.3 mil millones, un aumento del 8% interanual, y un crecimiento orgánico del 5%. La compañía logró un ratio de pedidos a facturación de 1.4x con pedidos de $7.2 mil millones. El EPS diluido aumentó un 4% a $2.10, mientras que el EPS diluido no-GAAP subió un 5% a $3.34.
La empresa aumentó su guía para 2024, proyectando ingresos de $21.1B - $21.3B, un margen operativo ajustado del segmento de aproximadamente el 15.5%, y un EPS diluido no-GAAP de $12.95 - $13.15. L3Harris también elevó su objetivo de ahorros de costos de $400 millones a al menos $600 millones para 2024, esperando alcanzar la meta de $1 mil millones un año antes.
L3Harris Technologies (NYSE: LHX)는 2024년 3분기 결과를 발표했으며, 매출은 $53억으로 전년 대비 8% 증가하고, 유기적 성장률은 5%를 기록했습니다. 회사는 주문 대 매출 비율 1.4x를 달성하였으며, 주문액은 $72억에 달합니다. 희석 주당 순이익(EPS)은 4% 증가하여 $2.10에 달했고, 비-GAAP 희석 EPS는 5% 상승하여 $3.34에 이르렀습니다.
회사는 2024년 매출 전망을 상향 조정하여 $211억 - $213억, 조정된 부문 운영 마진 약 15.5%, 비-GAAP 희석 EPS는 $12.95 - $13.15로 예측하였습니다. L3Harris는 또한 2024년 조정된 비용 절감 목표를 $4억에서 최소 $6억으로 상향 조정하였으며, 10억 달러 목표를 한 해 앞당겨 달성할 것으로 기대하고 있습니다.
L3Harris Technologies (NYSE: LHX) a annoncé de bons résultats pour le troisième trimestre 2024, avec un chiffre d'affaires de 5,3 milliards de dollars, en hausse de 8 % par rapport à l'année précédente, et une croissance organique de 5 %. L'entreprise a atteint un ratio commandes-facturation de 1,4x avec des commandes de 7,2 milliards de dollars. Le BPA dilué a augmenté de 4 % pour atteindre 2,10 dollars, tandis que le BPA dilué non-GAAP a progressé de 5 % pour s'établir à 3,34 dollars.
L'entreprise a revu à la hausse ses prévisions pour 2024, projetant un chiffre d'affaires de 21,1 à 21,3 milliards de dollars, une marge opérationnelle ajustée des segments d'environ 15,5 %, et un BPA dilué non-GAAP de 12,95 à 13,15 dollars. L3Harris a également relevé son objectif d'économies de coûts de 400 millions de dollars à au moins 600 millions de dollars pour 2024, prévoyant d'atteindre l'objectif d'un milliard de dollars un an plus tôt.
L3Harris Technologies (NYSE: LHX) hat starke Ergebnisse für das dritte Quartal 2024 gemeldet, mit einem Umsatz von $5,3 Milliarden, was einem Anstieg von 8% im Vergleich zum Vorjahr entspricht, und einem organischen Wachstum von 5%. Das Unternehmen erzielte ein Auftrags-Fakturierungs-Verhältnis von 1,4x mit Aufträgen in Höhe von $7,2 Milliarden. Der verwässerte Gewinn je Aktie (EPS) stieg um 4% auf $2,10, während der nicht-GAAP verwässerte EPS um 5% auf $3,34 anstieg.
Das Unternehmen erhöhte seine Prognosen für 2024 und rechnet mit einem Umsatz von $21,1 Milliarden - $21,3 Milliarden, einer adjustierten operativen Marge des Segments von etwa 15,5% und einem nicht-GAAP verwässerten EPS von $12,95 - $13,15. L3Harris hat auch sein Ziel für Kosteneinsparungen von $400 Millionen auf mindestens $600 Millionen für 2024 angehoben und plant, das Ziel von $1 Milliarde ein Jahr früher zu erreichen.
- Revenue increased 8% to $5.3 billion with 5% organic growth
- Strong book-to-bill ratio of 1.4x with $7.2 billion in orders
- Adjusted segment operating margin improved 70 bps to 15.7%
- Non-GAAP diluted EPS increased 5% to $3.34
- Cost savings target raised from $400M to $600M for 2024
- Guidance increased across all key metrics for 2024
- Operating margin declined to 9.4% from 9.7% year-over-year
- Year-to-date diluted EPS decreased 2% to $5.50
Insights
The Q3 results demonstrate robust performance with several positive indicators. Revenue growth of
Key financial improvements include:
- Adjusted segment operating margin expansion to
15.7% - Increased cost savings target from
$400M to$600M for 2024 - Raised full-year guidance for revenue and EPS
The accelerated cost savings program (LHX NeXt) reaching its
The results reflect L3Harris's strengthening position in the defense sector. Strong performance in Communication Systems, particularly in resilient communication products and night vision devices, aligns with current military modernization trends. The successful integration of Aerojet Rocketdyne is contributing meaningfully to growth.
The robust order book suggests strong defense spending environment and L3Harris's competitive positioning in key military programs. The focus on trusted disruptor strategy is resonating with defense customers, evidenced by continued contract wins. The pending Commercial Aviation business divestiture indicates strategic focus on core defense capabilities.
Highlights*
-
Orders of
$7.2 billion -
Revenue of
$5.3 billion 8% , and5% organically -
Operating margin of
9.4% ; adjusted segment operating margin of15.7% -
Diluted earnings per share (EPS) of
$2.10 $3.34 -
2024 revenue guidance range increased to
$21.1B $21.3B -
2024 adjusted segment operating margin guidance increased to ~
15.5% -
2024 non-GAAP diluted EPS guidance range increased to
$12.95 $13.15
"We delivered strong third-quarter results, highlighted by outstanding book-to-bill of 1.4x, solid organic growth, and while continuing to improve margins as we make progress toward the financial framework announced at our 2023 Investor Day. These results reaffirm that our Trusted Disruptor strategy is working, driving value for our customers, shareholders and employees," said Christopher E. Kubasik, Chair and CEO.
Kubasik added, "We are making impressive progress on our LHX NeXt initiative and expect to exceed the 2024 cost savings target of
*Organic revenue, adjusted segment operating margin and non-GAAP diluted EPS are non-GAAP financial measures defined on page 17. A reconciliation of adjusted segment operating margin guidance and non-GAAP diluted EPS guidance is not available. See the note on page 2 and Non-GAAP Financial Measures on page 7 for more information.
SUMMARY FINANCIAL RESULTS AND 2024 GUIDANCE*
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Third Quarter |
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Year to Date |
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2024 Guidance |
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($ millions, except per share data) |
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2024 |
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2023 |
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Change |
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2024 |
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2023 |
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Change |
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Revenue (see Table 4 for organic revenue) |
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|||||||||||
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Space & Airborne Systems |
$ |
1,683 |
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$ |
1,686 |
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$ |
5,141 |
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$ |
5,056 |
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Integrated Mission Systems |
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1,671 |
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1,568 |
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5,069 |
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5,003 |
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Communication Systems |
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1,382 |
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1,255 |
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4,022 |
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3,707 |
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Aerojet Rocketdyne |
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596 |
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455 |
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1,719 |
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455 |
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Corporate eliminations |
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(40 |
) |
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(49 |
) |
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(149 |
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(142 |
) |
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Revenue |
$ |
5,292 |
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$ |
4,915 |
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8 |
% |
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$ |
15,802 |
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$ |
14,079 |
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12 |
% |
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Operating income |
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Space & Airborne Systems |
$ |
195 |
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$ |
210 |
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$ |
626 |
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$ |
565 |
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Integrated Mission Systems |
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204 |
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187 |
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600 |
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534 |
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Communication Systems |
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359 |
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282 |
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998 |
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873 |
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Aerojet Rocketdyne |
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75 |
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56 |
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222 |
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56 |
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Corporate unallocated items |
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(338 |
) |
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(256 |
) |
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(1,097 |
) |
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(756 |
) |
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Operating income |
$ |
495 |
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$ |
479 |
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|
3 |
% |
|
$ |
1,349 |
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$ |
1,272 |
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6 |
% |
|
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|
Unallocated items (see Table 5) |
|
338 |
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256 |
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1,097 |
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|
795 |
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Adjusted segment operating income |
$ |
833 |
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$ |
735 |
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13 |
% |
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$ |
2,446 |
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$ |
2,067 |
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18 |
% |
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— |
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— |
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— |
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— |
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Margin |
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Operating margin |
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9.4 |
% |
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9.7 |
% |
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8.5 |
% |
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9.0 |
% |
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|
Adjusted segment operating margin |
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15.7 |
% |
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|
15.0 |
% |
|
70 bps |
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15.5 |
% |
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14.7 |
% |
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80 bps |
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~ |
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Tax rate |
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Effective tax rate (GAAP) |
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6.0 |
% |
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4.5 |
% |
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4.9 |
% |
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6.4 |
% |
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Effective tax rate (non-GAAP) |
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12.9 |
% |
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12.9 |
% |
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13.0 |
% |
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13.2 |
% |
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EPS |
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Diluted EPS |
$ |
2.10 |
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$ |
2.02 |
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4 |
% |
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$ |
5.50 |
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$ |
5.61 |
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(2 |
%) |
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Non-GAAP diluted EPS |
$ |
3.34 |
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$ |
3.19 |
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5 |
% |
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$ |
9.63 |
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$ |
9.01 |
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7 |
% |
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Pension adjusted non-GAAP diluted EPS |
$ |
2.94 |
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$ |
2.71 |
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8 |
% |
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$ |
8.44 |
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$ |
7.62 |
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11 |
% |
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Cash flow |
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Cash from operations |
$ |
780 |
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$ |
543 |
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44 |
% |
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$ |
1,430 |
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$ |
1,307 |
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9 |
% |
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Adjusted free cash flow |
$ |
728 |
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$ |
617 |
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18 |
% |
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$ |
1,286 |
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$ |
1,273 |
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1 |
% |
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Revenue: Third quarter revenue increased
* Adjusted segment operating income and margin, effective tax rate on non-GAAP income, non-GAAP diluted EPS, pension adjusted non-GAAP diluted EPS, organic revenue and adjusted free cash flow are non-GAAP financial measures defined on page 17. A reconciliation of adjusted segment operating income and margin, effective tax rate on non-GAAP income, non-GAAP diluted EPS and adjusted free cash flow on a forward-looking basis to GAAP is not available without unreasonable effort due to the unavailability of items for exclusion from the GAAP measure. We are unable to address the probable significance of this information, the variability of which may have a significant impact on future GAAP results. See Non-GAAP Financial Measures on page 7 for more information.
Operating Margin:
GAAP: Third quarter operating margin decreased 30 bps to
Adjusted segment operating margin: Expanded 70 bps to
Diluted EPS:
GAAP: Third quarter diluted EPS increased
Non-GAAP: Increased
Pension Adjusted Non-GAAP: Increased
The largest differences between GAAP and Non-GAAP diluted EPS are attributable to amortization of acquisition-related intangibles and LHX NeXt implementation costs.
Cash Flows:
Cash from Operations: Third quarter cash from operations increased
Adjusted free cash flow: Increased
SEGMENT RESULTS AND GUIDANCE*
SAS
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Third Quarter |
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Year to Date |
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2024 Guidance |
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($ millions) |
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2024 |
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2023 |
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Change |
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2024 |
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2023 |
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Change |
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Revenue |
$ |
1,683 |
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$ |
1,686 |
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— |
% |
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$ |
5,141 |
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$ |
5,056 |
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2 |
% |
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Operating margin |
|
11.6 |
% |
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|
12.5 |
% |
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(90) bps |
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|
12.2 |
% |
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|
11.2 |
% |
|
100 bps |
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low |
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Revenue: Third quarter revenue was flat, reflecting the divestiture of the antenna business in the second quarter. Excluding the divestiture impact, organic revenue increased
Operating Margin: Third quarter operating margin decreased 90 bps, primarily due to the absence of an
IMS
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Third Quarter |
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Year to Date |
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2024 Guidance |
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($ millions) |
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2024 |
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2023 |
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Change |
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2024 |
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2023 |
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Change |
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Revenue |
$ |
1,671 |
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$ |
1,568 |
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7 |
% |
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$ |
5,069 |
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$ |
5,003 |
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|
1 |
% |
|
(Prior: |
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Operating margin |
|
12.2 |
% |
|
|
11.9 |
% |
|
30 bps |
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|
11.8 |
% |
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|
10.7 |
% |
|
110 bps |
|
mid - high
(Prior: mid |
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Revenue: Third quarter revenue increased primarily from higher aircraft missionization volumes, increased advanced electronics demand for space and munitions programs, and higher volumes in our Commercial Aviation Solutions business, the divestiture of which is pending closure.
Operating Margin: Third quarter operating margin increased 30 bps, primarily from improved program performance across the segment, LHX NeXt cost savings and higher volume and favorable mix in Commercial Aviation Solutions, partially offset by unfavorable mix impact in our aircraft missionization business.
*Organic revenue is a non-GAAP financial measure defined on page 17.
CS
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Third Quarter |
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Year to Date |
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2024 Guidance |
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($ millions) |
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2024 |
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2023 |
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Change |
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2024 |
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2023 |
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Change |
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Revenue |
$ |
1,382 |
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|
$ |
1,255 |
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|
10 |
% |
|
$ |
4,022 |
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|
$ |
3,707 |
|
|
8 |
% |
|
(Prior: |
|
|
Operating margin |
|
26.0 |
% |
|
|
22.5 |
% |
|
350 bps |
|
|
24.8 |
% |
|
|
23.6 |
% |
|
120 bps |
|
mid - high
(Prior: mid |
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Revenue: Third quarter revenue increased
Operating Margin: Third quarter operating margin increased 350 bps as a result of strong performance from higher volumes, favorable high margin international mix, proprietary waveform license sales, and LHX NeXt cost savings.
AR
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Third Quarter |
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Year to Date |
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2024 Guidance |
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($ millions) |
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2024 |
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2023 |
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Change |
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2024 |
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2023 |
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Change |
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||||||||||
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Revenue |
$ |
596 |
|
|
$ |
455 |
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|
31 |
% |
|
$ |
1,719 |
|
|
$ |
455 |
|
|
278 |
% |
|
|
|
|
Operating margin |
|
12.6 |
% |
|
|
12.3 |
% |
|
60 bps |
|
|
12.9 |
% |
|
|
12.3 |
% |
|
60 bps |
|
mid
(Prior: high |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue and Operating Margin: Third quarter results are attributed to program execution across both sectors, Missile Solutions and Space Propulsion and Power Systems, reflecting a full quarter of contribution for 2024 and a partial quarter for 2023, from the July 28, 2023 acquisition date. Operating margins include the positive impact of amortization related to purchase price adjustments.
SUPPLEMENTAL INFORMATION*
|
|
|
2024 |
|
2023 |
|
|
|
Other Information |
|
Current |
Prior |
|
Actuals |
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating adjustment |
|
|
|
|
|
|
|
Non-service FAS pension income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate on GAAP income |
|
|
|
|
|
|
|
Effective tax rate on non-GAAP income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average diluted shares |
|
Flat |
Flat |
|
190.6 |
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
~ |
~ |
|
|
|
|
|
|
|
|
|
|
|
*Effective tax rate on non-GAAP income is a non-GAAP financial measure defined on page 17. A reconciliation of effective tax rate on non-GAAP income guidance is not available. See Non-GAAP Financial Measures on page 7 for more information.
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of federal securities laws made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples include, but are not limited to: potential divestitures and their timing; 2024 guidance; 2026 financial framework; anticipated LHX NeXt initiative costs and savings targets and 2026 margins; supplemental information for 2024; projection of other financial items; and assumptions underlying any of the foregoing. Investors should not place undue reliance on forward-looking statements, which reflect management’s current expectations, estimates, projections, assumptions and information currently available to management, and are not guarantees of future performance or actual results. Important risks that could cause our results to differ materially from those expressed in or implied by these forward-looking statements or from our historical results include, but are not limited to, risks arising from: competitive markets;
Non-GAAP Financial Measures
Management believes the adjustments to non-GAAP Financial Measures ("NGFMs") in the tables beginning on page 11 are useful to investors because the excluded costs do not reflect our ongoing operating performance. Such adjustments, considered together with the unadjusted GAAP financial measures, provide information that management believes is useful to investors to understand period-over-period operating results separate from items that management believes may disproportionately impact operating results in any particular period; however there is no guarantee that items excluded from NGFMs will not reoccur in future periods. Management also believes that NGFMs enhance the ability of investors to analyze business trends, understand performance and evaluate our initiatives to drive improved financial performance. Management utilizes NGFMs to guide forecasting and long-term planning and for compensation purposes. NGFMs should be considered in addition to, and not as a substitute for, financial measures presented in accordance with GAAP. A reconciliation of forward-looking NGFMs to GAAP is not available without unreasonable effort because of inherent difficulty in forecasting and quantifying comparable GAAP measures and applicable adjustments and other amounts necessary for a reconciliation because of potentially high variability, complexity and low visibility of applicable adjustments and other unusual amounts that could disproportionately impact future GAAP results, such as the impact of the acquisition of AR, LHX NeXt, potential divestitures and their timing, and the extent of tax deductibility.
Conference Call and Webcast
L3Harris Technologies will host a call tomorrow, October 25, 2024, at 8:30 a.m. Eastern Time (ET). Participants are encouraged to listen via webcast, which will be broadcast live at L3Harris.com/investors. The dial-in numbers for the teleconference are (
Table 1 - Condensed Consolidated Statement of Operations (Unaudited)
|
Third Quarter |
|
Year to Date |
||||||||||||
(In millions, except per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
5,292 |
|
|
$ |
4,915 |
|
|
$ |
15,802 |
|
|
$ |
14,079 |
|
Cost of revenue |
|
(3,873 |
) |
|
|
(3,608 |
) |
|
|
(11,675 |
) |
|
|
(10,419 |
) |
General and administrative expenses |
|
(924 |
) |
|
|
(828 |
) |
|
|
(2,778 |
) |
|
|
(2,388 |
) |
Operating income |
|
495 |
|
|
|
479 |
|
|
|
1,349 |
|
|
|
1,272 |
|
Non-service FAS pension income and other, net |
|
101 |
|
|
|
80 |
|
|
|
275 |
|
|
|
245 |
|
Interest expense, net |
|
(166 |
) |
|
|
(159 |
) |
|
|
(514 |
) |
|
|
(372 |
) |
Income before income taxes |
|
430 |
|
|
|
400 |
|
|
|
1,110 |
|
|
|
1,145 |
|
Income taxes |
|
(26 |
) |
|
|
(18 |
) |
|
|
(54 |
) |
|
|
(73 |
) |
Net income |
|
404 |
|
|
|
382 |
|
|
|
1,056 |
|
|
|
1,072 |
|
Noncontrolling interests, net of income taxes |
|
(4 |
) |
|
|
1 |
|
|
|
(7 |
) |
|
|
(3 |
) |
Net income attributable to L3Harris Technologies, Inc. |
$ |
400 |
|
|
$ |
383 |
|
|
$ |
1,049 |
|
|
$ |
1,069 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to L3Harris Technologies, Inc. common shareholders |
|||||||||||||||
Basic |
$ |
2.11 |
|
|
$ |
2.02 |
|
|
$ |
5.53 |
|
|
$ |
5.64 |
|
Diluted |
$ |
2.10 |
|
|
$ |
2.02 |
|
|
$ |
5.50 |
|
|
$ |
5.61 |
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares outstanding |
|
189.6 |
|
|
|
189.3 |
|
|
|
189.7 |
|
|
|
189.6 |
|
Diluted weighted-average common shares outstanding |
|
190.5 |
|
|
|
190.1 |
|
|
|
190.7 |
|
|
|
190.6 |
|
Table 2 - Consolidated Statement of Cash Flow (Unaudited)
|
Third Quarter |
|
Year to Date |
||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Operating Activities |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
404 |
|
|
$ |
382 |
|
|
$ |
1,056 |
|
|
$ |
1,072 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
324 |
|
|
|
310 |
|
|
|
963 |
|
|
|
816 |
|
Share-based compensation |
|
23 |
|
|
|
22 |
|
|
|
76 |
|
|
|
67 |
|
Pension and other postretirement benefit plan income |
|
(72 |
) |
|
|
(68 |
) |
|
|
(215 |
) |
|
|
(209 |
) |
Share-based matching contributions under defined contribution plans |
|
57 |
|
|
|
51 |
|
|
|
199 |
|
|
|
172 |
|
Deferred income taxes |
|
467 |
|
|
|
(34 |
) |
|
|
220 |
|
|
|
(277 |
) |
(Increase) decrease in: |
|
|
|
|
|
|
|
||||||||
Receivables, net |
|
188 |
|
|
|
158 |
|
|
|
163 |
|
|
|
53 |
|
Contract assets |
|
(207 |
) |
|
|
36 |
|
|
|
(372 |
) |
|
|
(136 |
) |
Inventories, net |
|
40 |
|
|
|
(80 |
) |
|
|
46 |
|
|
|
(195 |
) |
Other current assets |
|
(6 |
) |
|
|
(15 |
) |
|
|
(32 |
) |
|
|
(87 |
) |
Increase (decrease) in: |
|
|
|
|
|
|
|
||||||||
Accounts payable |
|
155 |
|
|
|
(41 |
) |
|
|
(45 |
) |
|
|
(18 |
) |
Contract liabilities |
|
(12 |
) |
|
|
(18 |
) |
|
|
(150 |
) |
|
|
202 |
|
Compensation and benefits |
|
(44 |
) |
|
|
(45 |
) |
|
|
(145 |
) |
|
|
(55 |
) |
Other current liabilities |
|
(26 |
) |
|
|
(24 |
) |
|
|
59 |
|
|
|
(27 |
) |
Income taxes |
|
(469 |
) |
|
|
5 |
|
|
|
(258 |
) |
|
|
15 |
|
Other operating activities |
|
(42 |
) |
|
|
(96 |
) |
|
|
(135 |
) |
|
|
(86 |
) |
Net cash provided by operating activities |
|
780 |
|
|
|
543 |
|
|
|
1,430 |
|
|
|
1,307 |
|
Investing Activities |
|
|
|
|
|
|
|
||||||||
Net cash paid for acquired businesses |
|
— |
|
|
|
(4,715 |
) |
|
|
— |
|
|
|
(6,688 |
) |
Additions to property, plant and equipment |
|
(78 |
) |
|
|
(148 |
) |
|
|
(290 |
) |
|
|
(312 |
) |
Proceeds from sales of businesses, net |
|
— |
|
|
|
— |
|
|
|
158 |
|
|
|
71 |
|
Other investing activities |
|
(15 |
) |
|
|
(1 |
) |
|
|
(19 |
) |
|
|
(9 |
) |
Net cash used in investing activities |
|
(93 |
) |
|
|
(4,864 |
) |
|
|
(151 |
) |
|
|
(6,938 |
) |
Financing Activities |
|
|
|
|
|
|
|
||||||||
Proceeds from borrowings, net of issuance cost |
|
585 |
|
|
|
5,319 |
|
|
|
2,826 |
|
|
|
7,568 |
|
Repayments of borrowings |
|
(2 |
) |
|
|
(2,099 |
) |
|
|
(2,609 |
) |
|
|
(3,159 |
) |
Change in commercial paper, maturities under 90 days, net |
|
(404 |
) |
|
|
806 |
|
|
|
93 |
|
|
|
1,330 |
|
Proceeds from commercial paper, maturities over 90 days |
|
— |
|
|
|
646 |
|
|
|
688 |
|
|
|
701 |
|
Repayments of commercial paper, maturities over 90 days |
|
(520 |
) |
|
|
— |
|
|
|
(1,205 |
) |
|
|
— |
|
Proceeds from exercises of employee stock options |
|
48 |
|
|
|
5 |
|
|
|
111 |
|
|
|
18 |
|
Repurchases of common stock |
|
(190 |
) |
|
|
— |
|
|
|
(512 |
) |
|
|
(518 |
) |
Dividends paid |
|
(220 |
) |
|
|
(216 |
) |
|
|
(665 |
) |
|
|
(652 |
) |
Other financing activities |
|
(6 |
) |
|
|
(1 |
) |
|
|
(36 |
) |
|
|
(34 |
) |
Net cash (used in) provided by financing activities |
|
(709 |
) |
|
|
4,460 |
|
|
|
(1,309 |
) |
|
|
5,254 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
14 |
|
|
|
(6 |
) |
|
|
9 |
|
|
|
(4 |
) |
Net decrease in cash and cash equivalents |
|
(8 |
) |
|
|
133 |
|
|
|
(21 |
) |
|
|
(381 |
) |
Cash and cash equivalents, beginning of period |
|
547 |
|
|
|
366 |
|
|
|
560 |
|
|
|
880 |
|
Cash and cash equivalents, end of period |
$ |
539 |
|
|
$ |
499 |
|
|
$ |
539 |
|
|
$ |
499 |
|
Table 3 - Condensed Consolidated Balance Sheet (Unaudited)
(In millions) |
September 27, 2024 |
|
December 29, 2023 |
||
|
|
|
|
||
Assets |
|
|
|
||
Current assets |
|
|
|
||
Cash and cash equivalents |
$ |
539 |
|
$ |
560 |
Receivables, net |
|
1,042 |
|
|
1,230 |
Contract assets |
|
3,401 |
|
|
3,196 |
Inventories, net |
|
1,399 |
|
|
1,472 |
Income taxes receivable |
|
329 |
|
|
61 |
Other current assets |
|
462 |
|
|
430 |
Assets of business held for sale |
|
1,130 |
|
|
1,106 |
Total current assets |
|
8,302 |
|
|
8,055 |
Non-current assets |
|
|
|
||
Property, plant and equipment, net |
|
2,795 |
|
|
2,862 |
Goodwill |
|
20,433 |
|
|
19,979 |
Intangible assets, net |
|
7,874 |
|
|
8,540 |
Deferred income taxes |
|
119 |
|
|
91 |
Other non-current assets |
|
2,366 |
|
|
2,160 |
Total assets |
$ |
41,889 |
|
$ |
41,687 |
Liabilities and equity |
|
|
|
||
Current liabilities |
|
|
|
||
Short-term debt |
$ |
1,177 |
|
$ |
1,602 |
Current portion of long-term debt, net |
|
640 |
|
|
363 |
Accounts payable |
|
2,049 |
|
|
2,106 |
Contract liabilities |
|
1,878 |
|
|
1,900 |
Compensation and benefits |
|
402 |
|
|
544 |
Income taxes payable |
|
35 |
|
|
88 |
Other current liabilities |
|
1,549 |
|
|
1,129 |
Liabilities of business held for sale |
|
243 |
|
|
272 |
Total current liabilities |
|
7,973 |
|
|
8,004 |
Non-current liabilities |
|
|
|
||
Long-term debt, net |
|
11,093 |
|
|
11,160 |
Deferred income taxes |
|
885 |
|
|
815 |
Other long-term liabilities |
|
2,876 |
|
|
2,879 |
Total liabilities |
|
22,827 |
|
|
22,858 |
Total equity |
|
19,062 |
|
|
18,829 |
Total liabilities and equity |
$ |
41,889 |
|
$ |
41,687 |
Reconciliation of Non-GAAP Financial Measures
Table 4 - Organic Revenue (Unaudited)
|
Third Quarter |
||||||||||||||||||||||
|
2024 |
|
|
2023 |
|
||||||||||||||||||
(In millions) |
GAAP |
|
Adjustments1 |
|
Organic |
|
GAAP |
|
Adjustments2 |
|
Organic |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
SAS |
$ |
1,683 |
|
|
$ |
— |
|
|
$ |
1,683 |
|
|
$ |
1,686 |
|
|
$ |
(42 |
) |
|
$ |
1,644 |
|
IMS |
|
1,671 |
|
|
|
— |
|
|
|
1,671 |
|
|
|
1,568 |
|
|
|
— |
|
|
|
1,568 |
|
CS |
|
1,382 |
|
|
|
— |
|
|
|
1,382 |
|
|
|
1,255 |
|
|
|
— |
|
|
|
1,255 |
|
AR |
|
596 |
|
|
|
(159 |
) |
|
|
437 |
|
|
|
455 |
|
|
|
— |
|
|
|
455 |
|
Corporate eliminations |
|
(40 |
) |
|
|
— |
|
|
|
(40 |
) |
|
|
(49 |
) |
|
|
— |
|
|
|
(49 |
) |
Revenue |
$ |
5,292 |
|
|
$ |
(159 |
) |
|
$ |
5,133 |
|
|
$ |
4,915 |
|
|
$ |
(42 |
) |
|
$ |
4,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Year to Date |
||||||||||||||||||||||
|
2024 |
|
|
2023 |
|
||||||||||||||||||
(In millions) |
GAAP |
|
Adjustments1 |
|
Organic |
|
GAAP |
|
Adjustments2 |
|
Organic |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
SAS |
$ |
5,141 |
|
|
$ |
— |
|
|
$ |
5,141 |
|
|
$ |
5,056 |
|
|
$ |
(70 |
) |
|
$ |
4,986 |
|
IMS |
|
5,069 |
|
|
|
— |
|
|
|
5,069 |
|
|
|
5,003 |
|
|
|
— |
|
|
|
5,003 |
|
CS |
|
4,022 |
|
|
|
— |
|
|
|
4,022 |
|
|
|
3,707 |
|
|
|
— |
|
|
|
3,707 |
|
AR |
|
1,719 |
|
|
|
(1,282 |
) |
|
|
437 |
|
|
|
455 |
|
|
|
— |
|
|
|
455 |
|
Corporate eliminations |
|
(149 |
) |
|
|
— |
|
|
|
(149 |
) |
|
|
(142 |
) |
|
|
— |
|
|
|
(142 |
) |
Revenue |
$ |
15,802 |
|
|
$ |
(1,282 |
) |
|
$ |
14,520 |
|
|
$ |
14,079 |
|
|
$ |
(70 |
) |
|
$ |
14,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
1Adjustment to exclude amounts attributable to each acquired business through the date of acquisition. |
|||||||||||||||||||||||
2Adjustment to exclude amounts attributable to each divested business. |
|||||||||||||||||||||||
Table 5 - Operating Income and Margin and Adjusted Segment Operating Income and Margin (Unaudited)
|
Third Quarter |
|
Year to Date |
||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Revenue (A) |
$ |
5,292 |
|
|
$ |
4,915 |
|
|
$ |
15,802 |
|
|
$ |
14,079 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (B) |
$ |
495 |
|
|
$ |
479 |
|
|
$ |
1,349 |
|
|
$ |
1,272 |
|
Corporate items add back1 |
|
33 |
|
|
|
(41 |
) |
|
|
86 |
|
|
|
(45 |
) |
Significant and/or non-recurring items: |
|
|
|
|
|
|
|
||||||||
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold2 |
|
210 |
|
|
|
208 |
|
|
|
642 |
|
|
|
576 |
|
Merger, acquisition, and divestiture-related expenses2 |
|
25 |
|
|
|
56 |
|
|
|
86 |
|
|
|
144 |
|
Business divestiture-related losses, net and impairment of goodwill and other assets2 |
|
29 |
|
|
|
— |
|
|
|
67 |
|
|
|
52 |
|
LHX NeXt implementation costs2 |
|
41 |
|
|
|
33 |
|
|
|
216 |
|
|
|
68 |
|
Total significant and/or non-recurring items |
|
305 |
|
|
|
297 |
|
|
|
1,011 |
|
|
|
840 |
|
Unallocated items |
|
338 |
|
|
|
256 |
|
|
|
1,097 |
|
|
|
795 |
|
Adjusted segment operating income (C) |
$ |
833 |
|
|
$ |
735 |
|
|
$ |
2,446 |
|
|
$ |
2,067 |
|
Margins |
|
|
|
|
|
|
|
||||||||
Operating margin (B)/(A) |
|
9.4 |
% |
|
|
9.7 |
% |
|
|
8.5 |
% |
|
|
9.0 |
% |
Adjusted segment operating margin (C)/(A) |
|
15.7 |
% |
|
|
15.0 |
% |
|
|
15.5 |
% |
|
|
14.7 |
% |
|
|
|
|
|
|
|
|
||||||||
1Corporate items add back includes unallocated corporate department expense of |
2Refer to Key Terms and Non-GAAP Definitions on page 17. |
Table 6 - Effective Tax Rate on Non-GAAP Income (unaudited)
|
Third Quarter |
|||||||||||||||||
|
2024 |
|
|
2023 |
|
|||||||||||||
(In millions) |
Earnings
|
|
Tax
(Benefit) |
|
Effective
|
|
Earnings
|
|
Tax
|
|
Effective
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Income before income taxes |
$ |
430 |
|
$ |
26 |
|
|
6.0 |
% |
|
$ |
400 |
|
$ |
18 |
|
4.5 |
% |
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold1 |
|
210 |
|
|
52 |
|
|
|
|
|
208 |
|
|
53 |
|
|
||
Merger, acquisition, and divestiture-related expenses1 |
|
25 |
|
|
5 |
|
|
|
|
|
56 |
|
|
8 |
|
|
||
Business divestiture-related losses, net and impairment of goodwill and other assets1 |
|
29 |
|
|
(6 |
) |
|
|
|
|
— |
|
|
3 |
|
|
||
LHX NeXt implementation costs1 |
|
41 |
|
|
18 |
|
|
|
|
|
33 |
|
|
8 |
|
|
||
Non-GAAP income before income taxes |
$ |
735 |
|
$ |
95 |
|
|
12.9 |
% |
|
$ |
697 |
|
$ |
90 |
|
12.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Year to Date |
|||||||||||||||||
|
2024 |
|
|
2023 |
|
|||||||||||||
(In millions) |
Earnings
|
|
Tax
(Benefit) |
|
Effective
|
|
Earnings
|
|
Tax
|
|
Effective
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Income before income taxes |
$ |
1,110 |
|
$ |
54 |
|
|
4.9 |
% |
|
$ |
1,145 |
|
$ |
73 |
|
6.4 |
% |
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold1 |
|
642 |
|
|
159 |
|
|
|
|
|
576 |
|
|
137 |
|
|
||
Merger, acquisition, and divestiture-related expenses1 |
|
86 |
|
|
16 |
|
|
|
|
|
144 |
|
|
26 |
|
|
||
Business divestiture-related losses, net and impairment of goodwill and other assets1 |
|
67 |
|
|
(8 |
) |
|
|
|
|
52 |
|
|
9 |
|
|
||
LHX NeXt implementation costs1 |
|
216 |
|
|
54 |
|
|
|
|
|
68 |
|
|
17 |
|
|
||
Non-GAAP income before income taxes |
$ |
2,121 |
|
$ |
275 |
|
|
13.0 |
% |
|
$ |
1,985 |
|
$ |
262 |
|
13.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
1Refer to Key Terms and Non-GAAP Definitions on page 17. |
||||||||||||||||||
Table 7 - Non-GAAP Diluted EPS (unaudited)
|
Third Quarter |
|
Year to Date |
||||||||||||
(In millions, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted-average common shares outstanding |
|
190.5 |
|
|
|
190.1 |
|
|
|
190.7 |
|
|
|
190.6 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS |
$ |
2.10 |
|
|
$ |
2.02 |
|
|
$ |
5.50 |
|
|
$ |
5.61 |
|
Significant and/or non-recurring items included in diluted EPS above: |
|
|
|
|
|
|
|
||||||||
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold1 |
|
1.10 |
|
|
|
1.09 |
|
|
|
3.37 |
|
|
|
3.02 |
|
Merger, acquisition, and divestiture-related expenses1 |
|
0.13 |
|
|
|
0.29 |
|
|
|
0.45 |
|
|
|
0.76 |
|
Business divestiture-related losses, net and impairment of goodwill and other assets1 |
|
0.15 |
|
|
|
— |
|
|
|
0.35 |
|
|
|
0.27 |
|
LHX NeXt implementation costs1 |
|
0.22 |
|
|
|
0.17 |
|
|
|
1.13 |
|
|
|
0.36 |
|
Income taxes on above adjustments |
|
(0.36 |
) |
|
|
(0.38 |
) |
|
|
(1.17 |
) |
|
|
(1.01 |
) |
Non-GAAP diluted EPS |
$ |
3.34 |
|
|
$ |
3.19 |
|
|
$ |
9.63 |
|
|
$ |
9.01 |
|
|
|
|
|
|
|
|
|
||||||||
1Refer to Key Terms and Non-GAAP Definitions on page 17. |
|||||||||||||||
Table 8 - Adjusted Free Cash Flow (unaudited)
|
Third Quarter |
|
Year to Date |
||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities |
$ |
780 |
|
|
$ |
543 |
|
|
$ |
1,430 |
|
|
$ |
1,307 |
|
Additions to property, plant and equipment |
|
(78 |
) |
|
|
(148 |
) |
|
|
(290 |
) |
|
|
(312 |
) |
Free cash flow |
|
702 |
|
|
|
395 |
|
|
|
1,140 |
|
|
|
995 |
|
Cash used for merger, acquisition and severance1,2 |
|
26 |
|
|
|
222 |
|
|
|
146 |
|
|
|
278 |
|
Adjusted free cash flow |
$ |
728 |
|
|
$ |
617 |
|
|
$ |
1,286 |
|
|
$ |
1,273 |
|
|
|
|
|
|
|
|
|
||||||||
1Refer to Key Terms and Non-GAAP Definitions on page 17. |
|||||||||||||||
| 22023 amounts reclassified to include cash paid for severance. | |||||||||||||||
Table 9 - Pension Adjusted Non-GAAP Diluted EPS (unaudited)
|
Third Quarter |
|
Year to Date |
||||||||
(In millions) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
||||
Non-GAAP diluted EPS1 |
$ |
3.34 |
|
$ |
3.19 |
|
$ |
9.63 |
|
$ |
9.01 |
Per share impact of: |
|
|
|
|
|
|
|
||||
FAS/CAS operating adjustment2 |
|
0.03 |
|
|
0.12 |
|
|
0.09 |
|
|
0.33 |
Non-service FAS pension income2 |
|
0.37 |
|
|
0.36 |
|
|
1.10 |
|
|
1.06 |
Pension adjusted non-GAAP diluted EPS |
$ |
2.94 |
|
$ |
2.71 |
|
$ |
8.44 |
|
$ |
7.62 |
|
|
|
|
|
|
|
|
||||
1Reconciled in Table 7. |
|||||||||||
| 2Net of tax effect. | |||||||||||
Key Terms and Non-GAAP Definitions
Description |
Definition |
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold |
Amortization of identifiable intangible assets acquired in connection with business combinations. Additional cost of revenue related to the fair value step-up in inventory is the difference between the balance sheet value of inventory from the acquiree and the acquisition date fair value. |
Merger, acquisition, and divestiture-related expenses |
Transaction and integration expenses associated with Tactical Data Links and AR acquisitions; external costs related to pursuing acquisition and divestiture portfolio optimization; non-transaction costs related to divestitures; and salaries of employees in roles dedicated to planned divestiture and acquisition activity. |
Business divestiture-related losses, net and impairment of goodwill and other assets |
In 2023, includes a gain on sale of our Visual Information Solutions business, impairment of contract assets and other assets related to the restructuring of a customer contract and impairment of in-process research and development associated with a facility closure. In 2024, includes valuation allowance increase related to the pending sale of our Commercial Aviation Solutions business (QTD and YTD) and impairment of goodwill and loss on sale recognized in connection with the sale of our antenna and related businesses (YTD). |
LHX NeXt implementation costs |
Costs related to the LHX NeXt initiative are expected to continue through 2025 and are expected to include workforce optimization costs and incremental IT expenses for implementation of new systems, third-party consulting expenses and other related costs, including costs related to personnel dedicated to this project.
|
LHX NeXt cost savings |
Represents annual gross run rate savings driven by the LHX NeXt transformation initiative. It is an operational measure that includes savings from initiatives related to labor and function optimization, direct and indirect procurement, and infrastructure expected to recur on an ongoing basis. |
Orders |
Total value of funded and unfunded contract awards received from the |
Organic revenue* |
Excludes the impact of completed divestitures and first year revenue associated with acquisitions and is reconciled in Table 4. |
Adjusted segment operating income and margin* |
On a consolidated basis represents operating income and margin, excluding the FAS/CAS operating adjustment, corporate unallocated items and items reconciled in Table 5. |
Non-GAAP diluted EPS* |
Represents EPS (net income per diluted common share attributable to L3Harris Technologies, Inc. common shareholders) adjusted for items reconciled in Table 7. |
Pension adjusted non-GAAP diluted EPS* |
Represents Non-GAAP diluted EPS, described above, adjusted for the after tax per share impact of the FAS/CAS operating adjustment and Non-service FAS pension income reconciled in Table 9. |
Adjusted Free Cash Flow* |
Net cash provided by operating activities less capital expenditures, cash used for merger, acquisition, and severance reconciled in Table 8. |
Cash used for merger, acquisition, and severance* |
Cash related to merger and acquisition expenses (described above) and severance costs included in LHX NeXt implementation costs. |
Non-GAAP income before income taxes* |
Represents income before income taxes adjusted for items reconciled in Table 6. |
Effective tax rate on non-GAAP income* |
Represents the effective tax rate (tax expense as a percentage of income before income taxes) adjusted for the tax effect of items reconciled in Table 6. |
_____ |
|
*Refer to Non-GAAP Financial Measures on page 7 for more information. |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241024360274/en/
Investor Relations Contact:
Daniel Gittsovich, 321-724-3170
investorrelations@l3harris.com
Media Relations Contact:
Sara Banda, 321-306-8927
media@l3harris.com
Source: L3Harris Technologies
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