01—Abstract
Summary
Summary of the 10-K filed February 25, 2022. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. (LHX) reported its fiscal year 2021 results, highlighting a company strategy focused on becoming a technology-focused operating company and a prime contractor for end-to-end mission solutions.
The company successfully exceeded its net cost synergy targets from the L3Harris Merger and completed its portfolio reshaping through six divestitures, utilizing proceeds to repurchase shares. Despite a 2% year-over-year revenue decrease to $17.8 billiona, primarily attributed to divestitures in Aviation Systems and supply chain constraints in Communication Systems, the company saw a significant 65% increase in income from continuing operations to $1.85 billion, with diluted earnings per share rising 75% to $9.09. This performance reflects strong execution, integration benefits, and a reduction in non-cash impairment charges compared to the previous year.
Looking ahead, L3Harris is well-positioned to capitalize on national security priorities and international growth opportunities, supported by investments in R&D and a focus on operational excellence. The company announced a 10%b increase in its quarterly cash dividend, underscoring its commitment to shareholder returns. Key financial indicators such as backlog remain robust, and the company is focused on maximizing cash flows for future strategic capital deployment.
02—Key points
Key Highlights
- Total revenue for fiscal year 2021 was $17.8 billion, a slight decrease of 2% compared to fiscal year 2020, primarily due to divestitures and supply chain challenges.
- Income from continuing operations attributable to L3Harris common shareholders significantly increased by 65% to $1.85 billion in fiscal year 2021.
- Diluted earnings per share grew by 75% to $9.09 in fiscal year 2021, driven by higher income and fewer outstanding shares due to repurchases.
- The company successfully achieved its net cost synergy targets from the L3Harris Merger, demonstrating effective integration and cost management.
- L3Harris completed a portfolio reshaping in fiscal year 2021 by divesting six businesses, generating proceeds that were used for share repurchases.
- The company announced a 10% increase in its quarterly cash dividend, raising the annualized rate to $4.48 per share, marking the 21st consecutive annual increase.
- Total backlog stood at $21.1 billion at December 31, 2021, with $15.2 billion being funded backlog, indicating continued strong demand for its products and services.
03—Questions
Frequently Asked Questions
What was L3Harris's financial performance in fiscal year 2021?
In fiscal year 2021, L3Harris reported total revenue of $17.8 billion, a 2% decrease from fiscal year 2020, mainly due to divestitures and supply chain constraints. However, income from continuing operations saw a substantial increase of 65% to $1.85 billion, and diluted earnings per share grew by 75% to $9.09. The company also successfully met its cost synergy targets and continued its strategy of portfolio shaping.
How did L3Harris manage its business portfolio during fiscal year 2021?
L3Harris actively managed its portfolio by completing six business divestitures during fiscal year 2021. The proceeds from these divestitures were strategically used to repurchase shares of the company's common stock. This aligns with the company's strategy to focus on technology-differentiated businesses.
What is L3Harris's outlook and shareholder return strategy?
L3Harris has a positive outlook, anticipating growth driven by alignment with national security priorities, international market expansion, and continued R&D investment. The company demonstrated its commitment to shareholder returns by announcing a 10% increase in its quarterly cash dividend, bringing the annualized rate to $4.48 per share, marking its 21st consecutive annual dividend increase. Share repurchases also remain a key component of their capital deployment strategy.
What are the main business segments of L3Harris, and have there been any changes?
For fiscal year 2021, L3Harris operated across four segments: Integrated Mission Systems, Space & Airborne Systems, Communication Systems, and Aviation Systems. However, effective January 1, 2022, the company streamlined its structure into three reportable segments, integrating the Aviation Systems segment's operations into Integrated Mission Systems and Space & Airborne Systems.
04—Continue