01—Abstract
Summary
Summary of the 10-K filed August 29, 2017. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies (formerly Harris Corporation) reported total revenue of $5.90 billiona for fiscal year 2017, a slight decrease from the previous year.
The company operates across three key segments: Communication Systems, Electronic Systems, and Space and Intelligence Systems. A significant strategic focus during fiscal year 2017 was the divestiture of non-core businesses, including IT Services and Harris CapRock Communications, to streamline operations and concentrate on technology-differentiated, high-margin areas. This strategic repositioning is expected to drive future growth and operational efficiencies.
The company also highlighted strong U.S. government customer relationships, with approximately 74%b of revenue derived from this segment. L3Harris demonstrated a commitment to shareholder returns through share repurchases and dividend increases, alongside disciplined capital deployment for debt reduction and investments in future growth.
02—Key points
Key Highlights
- Total revenue for fiscal year 2017 was $5.90 billion, a 2% decrease from $5.99 billion in fiscal year 2016.
- The company completed strategic divestitures of its IT Services and Harris CapRock Communications businesses in fiscal year 2017.
- L3Harris operates across three core segments: Communication Systems, Electronic Systems, and Space and Intelligence Systems.
- Approximately 74% of total revenue was derived from U.S. Government customers, underscoring the importance of this customer base.
- Income from continuing operations increased by 4% to $638 million in fiscal year 2017.
- The company returned $710 million to shareholders through share repurchases and $262 million in dividends during fiscal year 2017.
- Funded backlog at the end of fiscal 2017 was approximately $4.2 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, L3HARRIS Technologies, Inc. kept $0.09.
- Revenue$5.90B100.0%
- Cost of revenue−$3.85B65.4%
- Gross profit$2.04B34.6%
- Operating costs−$970.0M16.4%
- Operating income$1.07B18.2%
- Interest, other & tax−$530.0M9.0%
- Net income$543.0M9.2%
Where FY2017 revenue went
$5.90B- Cost of revenue: $3.85B, 65% of revenue
- Operating costs: $970.0M, 16% of revenue
- Net income: $543.0M, 9.2% of revenue
- Interest, other & tax: $530.0M, 9.0% of revenue
Kept 9.2% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed August 29, 2017Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $5.90B$5.99B | −1.6% |
| Cost of Revenue | $3.85B$3.83B | +0.6% |
| Gross Profit | $2.04B$2.16B | −5.4% |
| Operating Expenses | $1.15B$1.10B | +4.1% |
| Operating Income | $1.07B$1.05B | +1.7% |
| Interest Expense | $172.00M$183.00M | −6.0% |
| Net Income | $543.00M$324.00M | +67.6% |
| EPS (Basic) | $4.42$2.61 | +69.3% |
| EPS (Diluted) | $4.36$2.59 | +68.3% |
| Shares Outstanding (Basic) | 122.60M123.80M | −1.0% |
| Shares Outstanding (Diluted) | 124.30M125.00M | −0.6% |
05—Questions
Frequently Asked Questions
What were L3Harris's main strategic initiatives in fiscal year 2017?
In fiscal year 2017, L3Harris focused on streamlining its operations by divesting non-core businesses, specifically the IT Services and Harris CapRock Communications segments. This move was intended to concentrate on technology-differentiated, high-margin areas and optimize the company's portfolio for future growth.
How reliant is L3Harris on U.S. Government contracts?
L3Harris is significantly reliant on U.S. Government contracts, with approximately 74% of its total revenue in fiscal year 2017 derived from sales to U.S. Government customers, including foreign military sales funded through the U.S. Government. This highlights the company's strong position within the defense and national security sectors.
What is the company's approach to returning value to shareholders?
During fiscal year 2017, L3Harris demonstrated a commitment to shareholder value by repurchasing $710 million of its common stock and paying $262 million in dividends. The company also announced a 16th consecutive annual increase in its quarterly cash dividend rate.
What is the company's outlook for its business segments?
L3Harris anticipates growth across all three segments. For Communication Systems, it expects benefits from U.S. DoD modernizations starting in the second half of fiscal 2018. Electronic Systems is expected to see broad-based growth, particularly in electronic warfare. Space and Intelligence Systems projects continued strong growth in classified programs and increasing momentum in commercial space initiatives.
06—Continue