Core Insights - L3Harris (LHX) reported revenue of $5.52 billion for the quarter ended December 2024, marking a year-over-year increase of 3.4% and an EPS of $3.47, up from $3.35 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] Financial Performance - Revenue from Corporate eliminations was -$43 million, better than the average estimate of -$49.14 million, representing a year-over-year change of -8.5% [4] - Revenue from Space and Airborne Systems was $1.73 billion, below the estimated $1.82 billion, reflecting a -4% change year-over-year [4] - Revenue from Communication Systems was $1.44 billion, surpassing the estimated $1.39 billion, showing a +5.4% change year-over-year [4] - Revenue from Integrated Mission Systems was $1.77 billion, exceeding the average estimate of $1.63 billion, with a year-over-year change of +9% [4] - Revenue from Aerojet Rocketdyne was $628 million, below the average estimate of $701.13 million [4] Segment Operating Income - Integrated Mission Systems (IMS) reported operating income of $238 million, exceeding the average estimate of $191.18 million [4] - Communication Systems (CS) reported operating income of $326 million, below the estimated $348.41 million [4] - Space and Airborne Systems (SAS) reported operating income of $186 million, compared to the average estimate of $222.28 million [4] - Aerojet Rocketdyne reported operating income of $72 million, below the average estimate of $83.29 million [4] Stock Performance - L3Harris shares returned +0.8% over the past month, compared to the Zacks S&P 500 composite's +1.2% change, with a current Zacks Rank of 3 (Hold) indicating potential performance in line with the broader market [3]

Core Viewpoint - L3Harris (LHX) reported quarterly earnings of $3.47 per share, exceeding the Zacks Consensus Estimate of $3.43 per share, and showing an increase from $3.35 per share a year ago, indicating a positive earnings surprise of 1.17% [1][2] Financial Performance - The company achieved revenues of $5.52 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.30% and up from $5.34 billion year-over-year [2] - Over the last four quarters, L3Harris has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - L3Harris shares have increased approximately 0.8% since the beginning of the year, while the S&P 500 has gained 2.7%, indicating underperformance relative to the broader market [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.29 on revenues of $5.3 billion, and for the current fiscal year, it is $14.19 on revenues of $21.7 billion [7] - The trend of estimate revisions for L3Harris is mixed, which could change following the recent earnings report [6] Industry Context - The Aerospace - Defense industry, to which L3Harris belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, which may impact the stock's performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can significantly affect stock performance [5][8]

Financial Performance - Fourth quarter 2024 diluted EPS was $2.37, a 186% increase year-over-year, while full-year diluted EPS reached $7.87, up 22%[15]. - Fourth quarter 2024 revenue was $5.5 billion, a 3% increase, and full-year revenue was $21.3 billion, up 10%[6]. - Net income for 2024 increased to $1,512 million, up from $1,198 million in 2023, representing a growth of 26.2%[54]. - The company reported an operating income of $1,918 million for 2024, up from $1,426 million in 2023, marking a growth of 34.5%[57]. - The full year diluted EPS rose to $7.87 in 2024 from $6.44 in 2023, with Non-GAAP diluted EPS increasing to $13.10 from $12.36[62]. Cash Flow and Capital Management - 2024 cash from operations was $2.6 billion, a 22% increase, and adjusted free cash flow was $2.3 billion, up 14%[17]. - Operating cash flow for 2024 was $2,559 million, compared to $2,096 million in 2023, reflecting an increase of 22.1%[54]. - The net cash provided by operating activities for Q4 2024 was $1,129 million, up from $789 million in Q4 2023, leading to an adjusted free cash flow of $1,033 million compared to $756 million[63]. - The total adjusted free cash flow for the full year 2024 was $2,319 million, an increase from $2,029 million in 2023[63]. - The company repurchased $554 million in common stock during the year, compared to $518 million in the previous year, reflecting a 6.9% increase[54]. - The company paid dividends totaling $886 million in 2024, up from $868 million in 2023, an increase of 2.1%[54]. Operational Efficiency - The company exceeded its cost-savings target for 2024, achieving $800 million, and raised the overall goal to $1.2 billion by the end of 2025[4]. - The adjusted segment operating margin for the fourth quarter was 15.3%, a 20 basis points increase, and for the full year, it was 15.4%, up 60 basis points[12]. - Fourth quarter operating margin decreased by 340 bps to 22.7%, while the full year operating margin increased by 10 bps to 24.3%[35]. - Adjusted segment operating margin for the fourth quarter decreased by 170 bps to 24.4%, with a full year increase of 50 bps to 24.7%[35]. - The adjusted segment operating income for 2024 was $3,292 million, compared to $2,874 million in 2023, representing a growth of 14.6%[57]. Future Guidance - The company expects 2025 revenue guidance to be between $21.8 billion and $22.2 billion, with adjusted segment operating margins projected in the mid to high 15% range[43]. - Non-GAAP diluted EPS guidance for 2025 is set at $10.55 to $10.85, reflecting a growth of approximately 10% compared to 2024[43]. - The company anticipates adjusted free cash flow for 2025 to be between $2.4 billion and $2.5 billion, compared to $2.3 billion in 2024[43]. - The effective tax rate on non-GAAP income for 2025 is projected to be between 11.0% and 12.0%[46]. Tax Efficiency - The effective tax rate for GAAP in 2024 was 5.3%, compared to 1.9% in 2023[8]. - The effective tax rate on Non-GAAP income for the full year 2024 was 12.7%, compared to 13.0% in 2023, indicating improved tax efficiency[61]. - In Q4 2024, the company reported a Non-GAAP income before income taxes of $755 million, with an effective tax rate of 12.1% compared to 12.6% in Q4 2023[61]. - For the full year 2024, the company achieved a Non-GAAP income before income taxes of $2,876 million, with an effective tax rate of 12.7%, compared to 13.0% in 2023[61]. Market Demand and Backlog - The company achieved a record backlog of $34 billion, reflecting strong demand across all domains[4]. - Fourth quarter revenue growth was driven by Integrated Mission Systems and Communication Systems, which increased by 9% and 5%, respectively[9]. - Fourth quarter revenue for the AR segment increased by 5% to $628 million, with full year revenue soaring by 123% to $2,347 million[38]. - The book-to-bill ratio for 2024 was 1.14x, with orders totaling $24.2 billion[6]. Asset Management - Cash and cash equivalents at the end of the period increased to $615 million from $560 million, a rise of 9.8%[55]. - Total assets grew to $42,001 million in January 2025, compared to $41,687 million in December 2023, an increase of 0.8%[55]. - Long-term debt decreased slightly to $11,081 million from $11,160 million, a reduction of 0.7%[55]. Miscellaneous - The company noted potential impacts on Q1 2025 bookings and revenue due to U.S. Government contracting officers assessing the effects of recent Executive Orders[42]. - The company incurred $21 million in cash used for merger, acquisition, and severance costs in Q4 2024, down from $48 million in Q4 2023[63]. - The company plans to revise its Non-GAAP diluted EPS metric starting in Q1 2025 to exclude amortization of acquisition-related intangible assets, aligning with industry standards[66].

Core Viewpoint - L3Harris Technologies, Inc. (LHX) is expected to report its fourth-quarter 2024 results on January 30, 2025, with a consensus estimate indicating a 3.1% growth in sales year-over-year to $5.51 billion and a 2.4% increase in earnings per share to $3.43 [1][8][9] Segment Performance - The Integrated Mission Systems (IMS) segment is anticipated to show mixed results, with higher sales from avionics and advanced electronics, but potentially impacted by lower commercial aviation sales due to a recent strike. The revenue estimate for IMS is $1,626.2 million, reflecting a slight decline of 0.1% from the previous year [3][4] - The Space and Airborne Systems (SAS) unit is expected to benefit from strong sales in Intel & Cyber programs, with a revenue estimate of $1,824.2 million, indicating a 1.3% increase year-over-year. However, challenges from divestitures and lower F-35 volumes may affect performance [5][6] - The Communication Systems unit is projected to see growth driven by increased demand for resilient communication equipment, with a revenue estimate of $1,391.5 million, representing a 2.1% increase from the prior year [7] Earnings Expectations - Overall, L3Harris is expected to report notable growth in its top line, supported by positive synergies from the acquisition of Aerojet Rocketdyne. The consensus estimate for earnings is $3.43 per share, which implies a 2.4% increase from the year-ago quarter [8][9] - Despite the positive growth expectations, the model does not predict a definitive earnings beat for L3Harris, as the Earnings ESP stands at -0.17% and the company holds a Zacks Rank of 3 (Hold) [10][11]

Core Insights - The article emphasizes the expansion of coverage in the aerospace and defense sectors, including major original equipment manufacturers and European defense contractors [2]. Group 1: Industry Overview - The aerospace and defense industry presents significant growth prospects, driven by data-informed analysis [2]. - The investing group aims to identify investment opportunities within the aerospace, defense, and airline sectors [2]. Group 2: Analytical Tools - The article mentions the availability of data analytics monitors to support investment analysis [2].

Group 1 - The article discusses the strategy of hedging investment portfolios against uncertainties such as recessions, wars, and pandemics by investing in all-weather businesses [1] - The author has been involved in dividend investing since 2009 and has been documenting their journey towards financial independence through a blog focused on dividend growth investing since July 2018 [1] - The author expresses gratitude for the blog's role in connecting them with the Seeking Alpha community as an analyst [1] Group 2 - The article does not provide any specific company or industry analysis, focusing instead on personal investment philosophy and experiences [2]

Core Viewpoint - L3Harris (LHX) is currently viewed as a better value opportunity compared to Airbus Group (EADSY) based on various financial metrics and rankings [1]. Group 1: Zacks Rank and Earnings Outlook - L3Harris has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Airbus Group has a Zacks Rank of 4 (Sell) [3]. - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, suggesting that LHX is likely experiencing an improvement in its earnings outlook [3]. Group 2: Valuation Metrics - LHX has a forward P/E ratio of 16.96, significantly lower than EADSY's forward P/E of 29.89 [5]. - The PEG ratio for LHX is 1.85, while EADSY's PEG ratio is 3.26, indicating that LHX is expected to grow earnings at a more favorable rate relative to its price [5]. - LHX's P/B ratio stands at 2.21, compared to EADSY's P/B of 6.82, further highlighting LHX's relative undervaluation [6]. Group 3: Overall Value Assessment - Based on the solid earnings outlook and favorable valuation figures, LHX is assessed as the superior value option compared to EADSY [7].

Group 1 - L3Harris Technologies (NYSE: LHX) provides comprehensive technology solutions across various domains including space, air, land, sea, and cyber in the defense market [1] - The company is transitioning into a pure player in the defense technology sector, indicating a focused strategy on defense-related offerings [1] - The investment approach emphasizes fundamental analysis, long-term growth, and quality, targeting companies with strong growth potential and reasonable valuations [1] Group 2 - The investment strategy involves constructing a diversified portfolio of 15-20 stocks, focusing on risk management and macro-driven sector weights [1] - The goal is to achieve a 15% annual return, reflecting a disciplined approach to trading and valuations [1]

L3Harris Technologies, Inc. (NYSE:LHX) UBS Global Industrials Conference December 4, 2024 1:00 PM ET Company Participants Ross Niebergall - President, Aerojet Rocketdyne Ken Bedingfield - CFO Conference Call Participants Gavin Parsons - UBS Gavin Parsons Thanks, everybody, for participating in our session with L3Harris. We've got CFO, Ken Bedingfield, and Ross Niebergall, President of Aerojet Rocketdyne. Thanks, guys. Ross Niebergall Thank you. Ken Bedingfield Thanks, Gavin, for having us. And just real qui ...

L3Harris Technologies, Inc. (LHX) clinched an indefinite delivery and quantity deal worth $999 million from the United States Navy to offer U.S. and coalition forces resilient communication technology. The contract extends the company's previous 24 years of assistance, which provided a standard communication interoperability solution to the U.S. military forces and 57 partner nations.L3Harris will provide its Multifunctional Information Distribution System Joint Tactical Radio System Terminals (MIDS JTRS) t ...