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Will IMS Unit's Poor Performance Hit L3Harris Technologies Q2 Earnings?
ZACKS· 2025-07-21 14:16
Core Insights - L3Harris Technologies, Inc. (LHX) is expected to report second-quarter 2025 results on July 24, 2025, before market open, with a trailing four-quarter average earnings surprise of 2.27% [1] - The Integrated Mission Systems (IMS) segment is anticipated to show weak performance due to lower aircraft missionization volume and planned mission support program ramp down [1] - Overall, LHX is projected to report modest top-line growth, although a significant decline in its IMS unit may weigh on its overall performance [7] Revenue Estimates - The Zacks Consensus Estimate for IMS' second-quarter revenues is currently pegged at $1,581.9 million, indicating a decline of 8.5% from the year-ago quarter's figure [2] - The Communication Systems unit's revenues are estimated at $1,387.3 million, implying growth of 3.1% from the prior-year quarter's figure due to strong international demand for resilient communication equipment [3] - The Missile Solutions unit within Aerojet Rocketdyne is expected to report revenues of $662.4 million, reflecting a growth of 14% from the prior-year quarter [4] - The Space and Airborne Systems (SAS) unit's revenues are estimated at $1,737.3 million, indicating growth of 1.8% from the year-ago quarter's number [6] Overall Performance Expectations - LHX's overall second-quarter sales are projected at $5.30 billion, indicating a growth of 0.1% from the prior-year quarter [9] - Earnings are projected to decline by 23.5% year-over-year, despite a slight increase in total sales [8][10] - Poor operating margin performance in the IMS, SAS, and Aerojet Rocketdyne segments, along with unfavorable non-cash non-service FAS pension income, may adversely impact LHX's second-quarter bottom line [9] Earnings Prediction - The model predicts an earnings beat for L3Harris Technologies, supported by a positive Earnings ESP of +0.46% and a Zacks Rank of 3 [11][12]