L3Harris Reports Third-Quarter Financials
Friday, October 30, 2020 | Comments

L3Harris Technologies reported third-quarter 2020 revenues of $.45 billion, up 0.7% versus the prior year’s quarter, and up 4.4% on an organic basis. Generally accepted accounting principles (GAAP) net income was $430 million, down 1.1% versus the prior year.

Adjusted earnings before taxes and interest (EBIT) was $798 million, up 4.2% versus the prior year, and margin expanded 60 basis points to 17.9%. GAAP earnings per share (EPS) was $1.99, up to 4.7%, and non-GAAP EPS was $2.84, up 10% versus the prior year.

“The L3Harris team delivered a strong quarter that demonstrated integration progress, portfolio resiliency and the perseverance of our employee,” said L3Harris Chairman and CEO William M. Brown. “Our on-going execution puts us in a position to deliver on an improved outlook for the year, which we’ll build on over the medium term.”

Revenue for the quarter increased 0.7% versus prior-year GAAP as 3.3% growth in core U.S. and international businesses was offset by the divestiture of the airport security and automation business and COVID-19-related impacts, mainly for commercial-related sales. Organic revenue increased 4.4% for the quarter as 7.4% growth in core U.S. and international businesses, excluding commercial aviation and public safety, more than offset the anticipated decline from the pandemic. At the segment level, revenue growth was driven by integrated mission systems, space and airborne systems and communication systems, partially offset by a decline in aviation systems due to COVID-19-related impacts.

Third-quarter revenue for the communications segment increased 6% versus prior-year GAAP and 6.7% on an organic basis from growth in tactical communications, primarily due to strong demand in the Middle East, Europe and Asia Pacific, as well as a continued ramp in U.S. Department of Defense (DoD) modernization, partially offset by expected lower demand within public safety due to COVID-19. Third-quarter operating income increased 17% to $273 million and operating margin expanded 230 bps to 25% versus prior year from operational excellence, integration benefits and cost management.

Segment funded book-to-bill ratio was 0.99 for the quarter and 0.94 year-to-date.

The company strengthened its position in integrated networked systems with the award of a multimillion-dollar contract from the Bahrain Defense Forces to provide a C4I system as part of a battlefield management solution.

For 2020, the company expects revenues of $18.4 billion, GAAP net income margin of 7.4%, adjusted EBIT margin of 17.75%, GAAP EPS of $6.44 and non-GAAP EPS of $11.55. Overall, the company expects operating cash flow of $2.82-2.87 billion and free cash flow of $2.65-$2.7 billion.

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