L3Harris Reports Second-Quarter Results
Friday, July 31, 2020 | Comments

L3Harris Technologies reported second-quarter 2020 revenues of $4.4 billion, up 138% and flat versus prior-year generally accepted accounting principles (GAAP) and pro forma, respectively, and up 2.3% on an organic basis.

Net income was $278 million, up 4% and down 33% versus prior-year GAAP and pro forma, respectively. Adjusted earnings before interest and taxes (EBIT) was $810 million, up 9% versus prior-year adjusted pro forma, and margin increased 150 basis points (bps) to 18.2%. GAAP earnings per share (EPS) was $1.30, down 41% and 29% versus prior-year GAAP and pro forma, respectively. Non-GAAP EPS was $2.83, up 13% versus prior-year adjusted pro forma.

“Our top priority continues to be the safety of our workforce, and I am proud of their dedication as well as the progress we have made delivering on customer and shareholder commitments during the pandemic,” said William M. Brown, L3Harris chairman and CEO. “We’re now at the one-year mark post merger, and our performance highlights the benefits of the combination. Our traction with the integration and execution against strategic priorities give us confidence in our current-year outlook and position us well over the medium term."

Revenue for the quarter increased 138% versus prior-year GAAP due to the post-merger inclusion of L3 operations in results. On a pro forma basis, revenue was largely unchanged for the quarter, primarily driven by growth in the core U.S. defense-related businesses, offset by the divestiture of the airport security and automation business and COVID-19-related impacts, mainly in commercial-related businesses. On an organic basis, revenue increased 2.3% for the quarter primarily from growth in Integrated Mission Systems, Space and Airborne Systems, and Communication Systems, partially offset by a decline in Aviation Systems due to the pandemic.

GAAP EPS decreased 41% and 29% for the quarter versus prior-year GAAP and pro forma, respectively, due to divestiture-related charges, COVID-19-related impacts and amortization of merger-related intangibles, partially offset by operational excellence, cost management and integration benefits. Second-quarter non-GAAP EPS increased 13% versus prior-year adjusted pro forma driven by the favorable factors noted above, partially offset by the impacts of the pandemic.

For the quarter, net income margin decreased 810 bps and 310 bps versus prior-year GAAP and pro forma, respectively. Adjusted EBIT margin increased 150 bps to 18.2%.

Second-quarter revenue for the communications segment increased 83% and operating income increased 51% versus prior-year GAAP, primarily due to the post-merger inclusion of L3 operations in results and the factors below regarding pro forma revenue growth.

DoD modernization programs in tactical communications and integrated vision systems was partially offset by international tactical radio sales timing as well as lower demand, as expected, within public safety due to COVID-19. Second quarter operating income and non-GAAP operating income increased 11%, and non-GAAP operating margin expanded 190 bps to 23.9% versus prior-year pro forma from integration benefits and cost management. Segment funded book-to-bill was 1.03 for the quarter, as well as since the merger.

DoD tactical radio modernization order momentum continued in the second quarter, with a $95 million award for the third production order under the U.S. Army's $12.7 billion HMS Manpack indefinite delivery, indefinite quantity (IDIQ) contract. The company experienced solid international tactical radio demand in Europe for software-defined radio modernization, counter terrorism operations and anti-jamming networks, including strategic wins with the Ukraine Ministry of Defense for Falcon III HF and multiband radios.

In broadband communications, L3Harris extended its position as a key strategic SATCOM provider for the U.S. Army through a $41 million contract, with significant follow-on opportunity, to provide depot and sustainment services for the modernization of enterprise terminals program. The company also received a $74 million order for ROVER transceivers, supporting situational awareness and surveillance.

Would you like to comment on this story? Find our comments system below.

Post a comment
Name: *
Email: *
Title: *
Comment: *


No Comments Submitted Yet

Be the first by using the form above to submit a comment!


August 2022

7 - 10
APCO Conference and Expo 2022
Anaheim, California

More Events >

Site Navigation