Summary
L3Harris Technologies, Inc. (LHX) reported its second quarter fiscal year 2012 results, showing a slight revenue increase of 0.5% to $1,446.4 million compared to the prior year quarter. However, net income saw a significant decrease of 11.9% to $133.1 million, resulting in diluted earnings per share of $1.16, down from $1.18 in the prior year. This decline was primarily attributed to higher operating costs associated with recent acquisitions and integration efforts, particularly within the Integrated Network Solutions segment. Additionally, increased interest expenses due to higher borrowings to fund acquisitions and share repurchases also impacted profitability. The company's performance varied across its segments. RF Communications experienced a revenue decrease, partly due to the absence of significant expedited shipments seen in the prior year. Integrated Network Solutions saw revenue growth driven by acquisitions, but its operating income was negatively impacted by integration charges and losses in specific initiatives. The Government Communications Systems segment showed modest revenue growth and an increase in operating income, driven by a favorable product mix and cost performance. Despite the dip in net income, the company highlighted its strong financial position, substantial share repurchase activity, and commitment to returning capital to shareholders through dividends.
Key Highlights
- 1Revenue for the second quarter of fiscal 2012 increased slightly by 0.5% to $1,446.4 million, compared to $1,438.5 million in the prior year quarter.
- 2Net income attributable to Harris Corporation decreased by 11.9% to $133.1 million in the second quarter of fiscal 2012, down from $151.1 million in the prior year quarter.
- 3Diluted earnings per share declined to $1.16 from $1.18 year-over-year, reflecting the decrease in net income.
- 4Engineering, Selling, and Administrative (ESA) expenses increased by 12.2% to $286.4 million, primarily due to integration costs from recent acquisitions.
- 5Net cash provided by operating activities for the first two quarters of fiscal 2012 was $278.0 million, a decrease from $389.3 million in the same period last year.
- 6The company actively repurchased shares, using $417.0 million in the first two quarters of fiscal 2012, contributing to a reduction in weighted average shares outstanding.
- 7Long-term debt increased, with the company noting $544.9 million in short-term debt outstanding at the end of the quarter, primarily due to commercial paper issued to fund share repurchases.