10-KPeriod: FY2018

L3HARRIS TECHNOLOGIES, INC. /DE/ Annual Report, Year Ended Jun 29, 2018

Filed August 27, 2018For Securities:LHX

Summary

L3Harris Technologies, Inc. (LHX), formerly Harris Corporation, filed its 10-K for the fiscal year ending June 28, 2018, showcasing robust financial performance and strategic positioning within defense and government sectors. The company reported strong revenue growth and improved profitability, driven by its three core segments: Communication Systems, Electronic Systems, and Space and Intelligence Systems. Significant contract wins and a substantial backlog indicate continued demand for its technology-driven solutions. The company also highlighted its commitment to shareholder returns through dividends and share repurchases, alongside strategic investments in innovation and operational efficiency. Overall, L3Harris demonstrated resilience and growth, underscored by its focus on mission-critical, high-margin businesses. The company's strong customer relationships, particularly with the U.S. Government, and its diversified portfolio of advanced technology products and services position it favorably for future expansion. Investors can find confidence in the company's strategic execution, financial discipline, and ongoing efforts to enhance shareholder value.

Financial Highlights

30 data points
Beta

Revenue

$6.18B

65.9% Gross Margin

Net Income

$700.00M

11.3% Net Margin

EPS (Diluted)

$3.64

Free Cash Flow

$615.00M

Financial Statements
Beta
Revenue$6.18B
Cost of Revenue$2.10B
Gross Profit$4.08B
SG&A Expenses$583.00M
Operating Expenses$1.18B
Operating Income$1.12B
Interest Expense$170.00M
Net Income$700.00M
EPS (Basic)$3.71
EPS (Diluted)$3.64
Shares Outstanding (Basic)117.80M
Shares Outstanding (Diluted)120.30M

Key Highlights

  • 1Revenue growth of 5% to $6.2 billion in fiscal 2018, driven by increased demand in Communication Systems and Electronic Systems segments.
  • 2Income from continuing operations increased by 13% to $721 million, with a corresponding increase in diluted EPS to $5.94.
  • 3Strong backlog of $5.2 billion at fiscal year-end 2018, indicating robust future revenue potential.
  • 4Continued commitment to shareholder returns with a 17% increase in quarterly cash dividend rate and active share repurchase program.
  • 5Operational excellence program (HBX) and investments in R&D are driving efficiency and innovation across all segments.
  • 6Significant portion of revenue (75%) derived from U.S. Government customers, highlighting strategic importance and market penetration.
  • 7Successful integration of Exelis acquisition and strategic divestitures of non-core assets have streamlined operations and focused on high-margin businesses.

Frequently Asked Questions

L3Harris operates through three primary business segments: Communication Systems, Electronic Systems, and Space and Intelligence Systems. In fiscal 2018, these segments contributed approximately 31%, 38%, and 31% of total revenue, respectively.

L3Harris is significantly dependent on U.S. Government contracts. In fiscal 2018, approximately 75% of its revenue was derived from sales to U.S. Government customers, including foreign military sales funded through the U.S. Government, whether directly or through prime contractors.

L3Harris demonstrates a strong commitment to shareholder returns. This includes a consistent history of increasing its quarterly cash dividend and actively repurchasing its own stock. In fiscal 2018, the company returned $272 million through dividends and $272 million through share repurchases.

Key risks include significant dependence on U.S. Government contracts, potential disruptions to government funding, cybersecurity threats, competition, and risks associated with international operations and fluctuating currency exchange rates. The company also faces risks related to large contract terminations or failures to fund, and potential liabilities from its product and service offerings.