10-KPeriod: FY2017

L3HARRIS TECHNOLOGIES, INC. /DE/ Annual Report, Year Ended Jun 30, 2017

Filed August 29, 2017For Securities:LHX

Summary

L3Harris Technologies (formerly Harris Corporation) reported total revenue of $5.90 billion 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% 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.

Financial Highlights

30 data points
Beta

Revenue

$5.90B

34.6% Gross Margin

Net Income

$543.00M

9.2% Net Margin

EPS (Diluted)

$4.36

Free Cash Flow

$450.00M

Financial Statements
Beta
Revenue$5.90B
Cost of Revenue$3.85B
Gross Profit$2.04B
Operating Expenses$1.15B
Operating Income$1.07B
Interest Expense$172.00M
Net Income$543.00M
EPS (Basic)$4.42
EPS (Diluted)$4.36
Shares Outstanding (Basic)122.60M
Shares Outstanding (Diluted)124.30M

Key Highlights

  • 1Total revenue for fiscal year 2017 was $5.90 billion, a 2% decrease from $5.99 billion in fiscal year 2016.
  • 2The company completed strategic divestitures of its IT Services and Harris CapRock Communications businesses in fiscal year 2017.
  • 3L3Harris operates across three core segments: Communication Systems, Electronic Systems, and Space and Intelligence Systems.
  • 4Approximately 74% of total revenue was derived from U.S. Government customers, underscoring the importance of this customer base.
  • 5Income from continuing operations increased by 4% to $638 million in fiscal year 2017.
  • 6The company returned $710 million to shareholders through share repurchases and $262 million in dividends during fiscal year 2017.
  • 7Funded backlog at the end of fiscal 2017 was approximately $4.2 billion.

Frequently Asked Questions

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.

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.

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.

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.