Core Insights - Shield AI and L3Harris Technologies are collaborating on a demonstration for electronic warfare operations using AI-enabled unmanned systems that can sense, adapt, and act in real-time [1] - The collaboration integrates L3Harris' DiSCO™ system with Shield AI's Hivemind autonomy software to enhance decision-making capabilities in complex battlefield environments [2][3] Company Overview - Shield AI, founded in 2015, focuses on defense technology and intelligent systems to protect service members and civilians, with its Hivemind software enabling reliable operations in contested environments [4] - L3Harris Technologies is recognized as a trusted disruptor in the defense industry, providing end-to-end technology solutions across multiple domains for national security [5] Strategic Importance - The integration of Hivemind with L3Harris' electronic warfare capabilities aims to create dynamic maneuverability in contested environments, addressing the complexities of modern warfare [3] - Both companies plan to continue demonstrations and integrations to deliver scalable, multi-domain solutions for the U.S. and its allies [3]

Core Insights - L3Harris Technologies is participating in the Barclays 42nd Annual Industrial Select Conference, indicating its engagement with investors and stakeholders [1] - The company anticipates 2025 to be a year of unprecedented change, uncertainty, and volatility, reflecting broader industry trends and challenges [4] Company Overview - Ken Bedingfield serves as the Senior Vice President and Chief Financial Officer, while Chris Kubasik is the Chair and Chief Executive Officer, highlighting the leadership structure of the company [1] - The company is preparing for discussions around the budget process, including considerations related to continuing resolutions (CR), fiscal year 2025 budget reconciliation, and the debt ceiling for 2026 [3] Industry Context - The company views the top line as a proxy for defense spending, suggesting a focus on government contracts and defense-related revenue streams [4] - There has been a notable increase in executive orders, with over 70 issued in a short period, indicating a dynamic regulatory environment that could impact the defense sector [4]

Financial Performance - Company-wide total backlog was $34.2 billion as of January 3, 2025, up from $32.7 billion on December 29, 2023, with expectations to recognize approximately 45% of this backlog revenue by the end of fiscal 2025 and 75% by the end of fiscal 2026 [31]. - In fiscal 2024, 76% of the company's revenue was derived from sales to U.S. Government customers, with no other customer accounting for more than 5% of total revenue [35]. Workforce and Talent Management - The company hired approximately 4,500 new employees in fiscal 2024, focusing on attracting and retaining skilled talent, particularly in technical and engineering fields [48]. Environmental Sustainability - The company plans to reduce its Scope 1 and Scope 2 greenhouse gas emissions by 60% and water usage by 20% by 2030, compared to 2021 levels [49]. Debt and Financial Risk - At January 3, 2025, the company had long-term debt with a carrying value of $11,530 million, all of which is fixed-rate debt [269]. - The cumulative impact of translating foreign subsidiary assets and liabilities to U.S. dollars resulted in a $265 million loss as of January 3, 2025 [266]. - The company has open foreign currency forward contracts with an aggregate notional amount of $201 million to hedge against currency risk [267]. - Approximately 10% of the company's business was transacted in local currency environments in fiscal 2024 [266]. - As of January 3, 2025, the company had $515 million in short-term variable-rate debt outstanding under its CP Program [270]. - The fair value of the short-term debt approximates the carrying value due to its short-term nature [270]. - The outstanding notes under the CP Program bear interest that is variable based on certain short-term indices, exposing the company to interest-rate risk [270]. - A hypothetical 10% change in interest rates on short-term debt obligations would not have had a material impact on the company's results of operations or cash flows [270]. - The company cannot assure that interest rates will not change significantly or have a material effect on the fair value of its debt obligations over the next twelve months [271]. - Information regarding the maturities of the company's fixed-rate debt obligations and CP program can be found in Note 8: Debt and Credit Arrangements [271]. Strategic Partnerships and Innovation - The company collaborates with strategic partners like Palantir Technologies and Shield Capital to enhance technological capabilities and meet customer demands [30]. Safety and Risk Management - The company maintains a proactive safety culture and implements programs to reduce workplace incidents and risks [46].

Core Insights - The Motley Fool aims to enhance the financial literacy and well-being of individuals by providing various financial services and educational resources [1] Company Overview - Founded in 1993, The Motley Fool is a financial services company focused on making the world smarter, happier, and richer [1] - The company reaches millions of people monthly through premium investing solutions, free guidance, market analysis, personal finance education, top-rated podcasts, and its non-profit foundation [1]

Core Viewpoint - L3Harris Technologies, Inc. (LHX) reported strong fourth-quarter and full-year earnings for 2024, surpassing consensus estimates, driven by increased revenues and operating income across various segments [1][2][4]. Financial Performance - The adjusted earnings per share (EPS) for Q4 2024 were $3.47, exceeding the Zacks Consensus Estimate of $3.43 by 1.2% and up 3.6% from $3.35 in the same quarter last year [1] - For the full year 2024, adjusted EPS was $13.10, higher than $12.36 in 2023 and beating the consensus estimate of $13.07 [2] - Total revenues for Q4 2024 reached $5.52 billion, slightly above the consensus estimate of $5.51 billion and a 3.4% increase from $5.34 billion in Q4 2023 [3] - Full-year revenues for 2024 were $21.33 billion, up from $19.42 billion in 2023, also surpassing the consensus estimate of $21.31 billion [4] Segmental Performance - Integrated Mission Systems segment reported net revenues of $1.77 billion, a 9% year-over-year growth, driven by higher aircraft missionization volumes and demand for advanced electronics [5] - Space and Airborne Systems segment saw net revenues decline by 4% to $1.73 billion, attributed to the divestiture of the antenna business and lower organic revenues [7] - Communication Systems segment revenues increased by 5.4% to $1.44 billion, supported by strong demand for resilient communication equipment, although operating income decreased [9] - Aerojet Rocketdyne segment reported revenues of $628 million, a 5.2% increase year-over-year, driven by higher production volumes across key missile programs [10] Financial Position - As of January 3, 2025, L3Harris had $615 million in cash and cash equivalents, an increase from $560 million at the end of 2023 [12] - Long-term debt decreased to $11.08 billion from $11.16 billion as of December 29, 2023 [12] - Net cash flow from operating activities for 2024 was $2.56 billion, up from $2.10 billion in the previous year, with adjusted free cash flow at $2.32 billion compared to $2.03 billion in 2023 [12] 2025 Guidance - L3Harris expects 2025 revenues to be in the range of $21.80-$22.20 billion, higher than the Zacks Consensus Estimate of $21.70 billion [13] - The company anticipates adjusted EPS to be between $10.55-$10.85, lower than the previous guidance of $13.70-$14.00, with the consensus estimate at $14.19 [14] - Adjusted segment operating margin is expected to be in the mid-to-high 15% range, with adjusted free cash flow projected between $2.40-$2.50 billion [14]

FOURTH QUARTER 2024 EARNINGS PRESENTATION JANUARY 30, 2025 Forward-Looking Statements; Non-GAAP Measures This presentation 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, statements about 2025 guidance, 2025 supplemental information, 2026 financial framework, capital allocation priorities, future product deliveries; projection of ...

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]