L3Harris(LHX)2025-01-30 12:00Financial 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].