Core Viewpoint - The U.S. government has commissioned L3Harris to undertake a comprehensive modification of a Boeing 747 that was previously used by the Qatari government [1] Group 1 - The modification project involves a Boeing 747, indicating a significant investment in upgrading existing aircraft [1] - L3Harris is recognized for its capabilities in defense and aerospace, suggesting a strategic move by the U.S. government to enhance its operational capabilities [1]

Group 1 - The professional background includes experience in private banking, corporate finance, and strategic advisory across multiple continents [1] - A private banking department was developed and led in Dubai, focusing on tailored investment solutions for affluent clients in the Middle East [1] - Involvement in managing cross-border M&A transactions in Indonesia, with a successful track record in emerging markets [1] Group 2 - The goal is to provide well-researched commentary on various industries and asset classes, including high-growth technology equities and undervalued blue-chip stocks [1] - The aim is to help readers navigate complex global markets with a risk-aware and fundamentally driven investment approach [1]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $5.1 billion, reflecting flat organic growth due to a short twelve-week quarter [24] - Non-GAAP EPS was $2.41, up 7% year-over-year [25] - Free cash flow was an outflow of about $70 million, significantly less than the outflow in Q1 2024, indicating improved cash flow management [25] - The company returned nearly $800 million to shareholders, marking the twenty-fourth consecutive annual dividend increase [26] Business Line Data and Key Metrics Changes - Communication Systems (CES) revenue was $1.3 billion, up 4%, with an operating margin of 25.5% [27] - Integrated Mission Systems (IMS) revenue was $1.6 billion, down 2%, with an operating margin of 12.8% [28] - Space and Airborne Systems (SAS) revenue was $1.6 billion, down 6% organically, with an operating margin of 10.9% [29] - Aerojet Rocketdyne (AR) revenue showed strong results with 9% organic growth, driven by improved production volume across key missile programs [30] Market Data and Key Metrics Changes - The company is experiencing strong demand for mission-critical solutions across key regions, particularly in Europe, where defense spending is increasing [17] - A key international award was secured with the Dutch Ministry of Defense for network modernization valued at over $1.1 billion [20] Company Strategy and Development Direction - The company is focused on executing the LHX NEXT initiative, aiming for $1.2 billion in gross run rate savings this year [38] - Strategic collaborations are emphasized, including partnerships with Kuiper Government Solutions and Shield AI to enhance capabilities in satellite communications and AI-enabled systems [31][33] - The company is transitioning its portfolio to focus on national security, having divested its commercial aviation solutions business [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities despite challenges, particularly in the context of the new administration's defense budget priorities [44] - The company anticipates revenue of $21.4 billion to $21.7 billion for 2025, reflecting organic growth of 4% at the midpoint [44] - Management is closely monitoring the FY 2026 defense budget and expects to provide further updates in the next quarter [43] Other Important Information - The company has made substantial investments in new space factories and is well-positioned to respond to emerging defense needs [13] - The company is actively managing risks related to international components and trade landscape changes [49][50] Q&A Session Summary Question: Concerns about international sales in Europe - Management expressed confidence in international prospects, citing recent orders and the urgency for modernization in European countries [60][61] Question: Investment in Golden Dome - Management confirmed ongoing investments in satellite capabilities and highlighted the potential for future awards related to the Golden Dome initiative [65][66] Question: Challenges in classified programs - Management acknowledged challenges in certain classified programs but expects these to be resolved by 2025 or early 2026, with a focus on future growth [78][81] Question: Airborne market prospects - Management indicated that the airborne market is solid, with expectations for growth in the F-35 portfolio starting in 2026 [87][88] Question: Opportunities in Aerojet Rocketdyne - Management highlighted the strong position of Aerojet Rocketdyne in addressing national security needs and the focus on capacity expansion [91][92] Question: Visibility into the fiscal 2026 budget - Management expects the 2026 budget to be released in May and is actively engaging with key stakeholders to ensure support for their programs [122][124] Question: Procurement reform and its impact - Management emphasized the need for procurement reform to enhance efficiency and purchasing power for the DOD, which could favor companies that adapt quickly [132][138]

Core Viewpoint - L3Harris Technologies, Inc. (LHX) reported strong adjusted earnings for Q1 2025, exceeding expectations, but faced revenue challenges due to divestitures and segment performance variations [1][3][11]. Financial Performance - Adjusted earnings per share for Q1 2025 were $3.47, surpassing the Zacks Consensus Estimate of $2.32 by 3.9% and increasing 7.1% from $2.25 in the previous year [1]. - GAAP earnings were reported at $2.04 per share, up from $1.48 in the prior-year period [1]. - Total revenues for L3Harris were $5.13 billion, missing the Zacks Consensus Estimate of $5.23 billion by 1.9% and down 1.5% from $5.21 billion year-over-year [3]. Segmental Performance - Integrated Mission Systems reported net revenues of $1.59 billion, a 2% decline year-over-year, but operating income increased to $203 million from $185 million, with an operating margin of 12.8% [4][5]. - Space and Airborne Systems had net revenues of $1.61 billion, an 8% decline year-over-year, with operating income dropping to $176 million and an operating margin of 10.9% [6]. - Communication Systems saw a 4% increase in net revenues to $1.35 billion, with operating income improving to $345 million and an operating margin of 25.5% [7]. - Aerojet Rocketdyne reported revenues of $629 million, an 8% year-over-year increase, but operating income slightly decreased to $76 million with an operating margin of 12.1% [8]. Financial Position - As of March 28, 2025, L3Harris had $517 million in cash and cash equivalents, down from $615 million as of January 3, 2025 [9]. - Long-term debt decreased to $10.98 billion from $11.08 billion [10]. - Adjusted free cash flow for Q1 2025 was $72 million, down from $156 million in the same quarter of 2024 [10]. 2025 Guidance - L3Harris updated its revenue guidance for 2025 to a range of $21.40-$21.70 billion, lower than the previous guidance of $21.80-$22.20 billion [11]. - The company expects adjusted earnings to be in the range of $10.30-$10.50, with the consensus estimate at $10.57 per share [12]. - The adjusted segment operating margin is anticipated to be in the mid-to-high 15% range, with expected adjusted free cash flow between $2.40 billion and $2.50 billion [12].

Core Insights - L3Harris (LHX) reported $5.13 billion in revenue for Q1 2025, a year-over-year decline of 1.5% and an EPS of $2.41, down from $3.06 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $5.23 billion by 1.89%, while the EPS exceeded the consensus estimate of $2.32 by 3.88% [1] Revenue Breakdown - Corporate eliminations reported at -$52 million, slightly worse than the average estimate of -$50.35 million, showing a year-over-year change of +15.6% [4] - Revenue from Space and Airborne Systems was $1.61 billion, below the average estimate of $1.72 billion, reflecting a year-over-year decline of -8% [4] - Aerojet Rocketdyne generated $629 million, surpassing the average estimate of $561.74 million, with a year-over-year increase of +16.1% [4] - Integrated Mission Systems reported $1.59 billion, below the average estimate of $1.69 billion, indicating a year-over-year decline of -4.6% [4] - Communication Systems achieved $1.35 billion, exceeding the average estimate of $1.31 billion, with a year-over-year increase of +4.5% [4] Segment Operating Income - Aerojet Rocketdyne's segment operating income was $76 million, above the average estimate of $68.50 million [4] - Communication Systems reported segment operating income of $345 million, exceeding the average estimate of $318.34 million [4] - Space and Airborne Systems had segment operating income of $176 million, below the average estimate of $202.47 million [4] - Integrated Mission Systems reported segment operating income of $203 million, slightly above the average estimate of $200.65 million [4] Stock Performance - L3Harris shares returned +2.1% over the past month, contrasting with the Zacks S&P 500 composite's -5.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Performance - Total revenue for the first quarter of 2025 was $5,132 million, a decrease of 1.5% from $5,211 million in the first quarter of 2024[90]. - The operating income for the first quarter of 2025 was $525 million, an increase from $378 million in the first quarter of 2024[90]. - Net EAC adjustments for the first quarter of 2025 resulted in a loss of $21 million before income taxes, compared to a gain of $19 million in the same period of 2024[79]. - The company completed the sale of its CAS disposal group for cash proceeds of $831 million, with a pre-tax loss of $17 million recognized in the first quarter of 2025[83][85]. - Capital expenditures for the first quarter of 2025 totaled $59 million, significantly lower than $115 million in the first quarter of 2024[100]. - The company reported a total of $301 million in depreciation and amortization for the first quarter of 2025, down from $320 million in the same period of 2024[100]. - The CS segment generated revenue of $1,352 million in the first quarter of 2025, up from $1,294 million in the first quarter of 2024[90]. - The IMS segment reported revenue of $1,592 million in the first quarter of 2025, a decrease from $1,627 million in the first quarter of 2024[90]. Environmental Liabilities - As of March 28, 2025, the estimated environmental liability under applicable statutes and regulations for identified sites was $637 million[105]. - The recoverable portion of environmental costs from the U.S. Government was recorded as $463 million as of March 28, 2025[106]. - The current and non-current portions of the estimated environmental liability are included in "Other current liabilities" and "Other long-term liabilities" on the balance sheet[105]. - The current and non-current portions of the recoverable costs are included in "Other current assets" and "Other non-current assets" on the balance sheet[106]. - The company is identified as a potentially responsible party under various environmental laws, with uncertainties regarding liability and cost sharing[104]. - The company is subject to numerous environmental laws and regulations, with some liabilities considered de minimis[104]. Legal Matters - The company is involved in various legal proceedings, but as of March 28, 2025, the accrual for potential unfavorable resolutions was not material[103]. - The company has recorded accruals for losses related to legal matters that are considered probable and can be reasonably estimated[103]. - The company’s management believes that any probable settlements or judgments will not have a material adverse effect on its financial condition[103]. Strategic Initiatives - The company is undergoing the LHX NeXt initiative, expected to continue through 2026, aimed at transforming multiple functions and increasing competitiveness[94]. Market Risk - There were no material changes in market risk exposure during the first quarter of 2025 compared to the previous fiscal year[176]. Backlog - As of March 28, 2025, the company's ending backlog was $33.2 billion, with an expectation to recognize approximately 50% of this revenue over the next twelve months[82].

L3Harris (LHX) came out with quarterly earnings of $2.41 per share, beating the Zacks Consensus Estimate of $2.32 per share. This compares to earnings of $3.06 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of 3.88%. A quarter ago, it was expected that this technology and communications company would post earnings of $3.43 per share when it actually produced earnings of $3.47, delivering a surprise of 1.17%. Over the last four ...

Exhibit 99.1 Earnings Release L3Harris Technologies Reports First Quarter 2025 Results, Updates 2025 Guidance Highlights* MELBOURNE, Fla., April 24, 2025 — L3Harris Technologies (NYSE: LHX) reported first quarter 2025 diluted EPS of $2.04 on first quarter 2025 revenue of $5.1 billion. First quarter 2025 non-GAAP diluted EPS was $2.41. Reconciliations of non-GAAP results are detailed in tables beginning on page 10. "We're building on our momentum with a strong start to the year, driven by solid operational e ...

Core Viewpoint - L3Harris Technologies, Inc. (LHX) is expected to report first-quarter 2025 results on April 24, 2025, with a projected revenue growth of 0.9% year-over-year, despite a decline in earnings per share by 23.5% compared to the previous year [1][7][9]. Group 1: Revenue Performance by Segment - The Integrated Mission Systems (IMS) segment is anticipated to see a revenue increase of 1.4% year-over-year, with estimates at $1,692 million, driven by higher demand for defense electronics and airborne sensors [2]. - The Communication Systems unit is expected to report revenues of $1,309 million, reflecting a growth of 1.2% from the prior year, supported by increased demand for resilient communication equipment [3]. - The Aerojet Rocketdyne segment is projected to achieve revenues of $561.7 million, indicating a growth of 3.6% year-over-year, aided by synergies from its acquisition and strong demand for rocket motor production [4]. - The Space and Airborne Systems (SAS) segment is estimated to generate revenues of $1,719.4 million, which represents a decline of 1.8% from the previous year, impacted by the divestiture of its antenna business and challenges in classified development programs [5][6]. Group 2: Overall Financial Expectations - The overall revenue for LHX is estimated at $5.26 billion for the first quarter, marking a growth of 0.9% from the prior-year quarter [7]. - Despite solid revenue growth expectations, the earnings per share estimate is pegged at $2.34, reflecting a significant decline of 23.5% year-over-year, primarily due to lower non-cash non-service FAS pension income [9]. - The company has an Earnings ESP of -1.77% and a Zacks Rank of 3, indicating that the model does not predict a definitive earnings beat for this quarter [10].

In its upcoming report, L3Harris (LHX) is predicted by Wall Street analysts to post quarterly earnings of $2.34 per share, reflecting a decline of 23.5% compared to the same period last year. Revenues are forecasted to be $5.26 billion, representing a year-over-year increase of 0.9%.The consensus EPS estimate for the quarter has undergone a downward revision of 1.8% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial est ...