01—Abstract
Summary
Summary of the 10-Q filed October 31, 2012. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. (LHX) reported a net loss of $85.8 milliona for the quarter ended September 28, 2012, a significant shift from the net income of $121.6 million in the prior year's comparable quarter.
This loss was primarily driven by a substantial charge related to discontinued operations, specifically impairment charges of $222.3 millionb for the divestiture of Broadcast Communications and the exit of its cyber integrated solutions operation (CIS). Excluding these discontinued operations, income from continuing operations was $128.5 million, a slight decrease from $131.1 million in the prior year, but earnings per diluted share saw a modest increase to $1.14 from $1.09, largely due to a reduction in outstanding shares. Revenue for the quarter declined by 5.6% to $1,261.5 million, attributed to lower sales in the RF Communications and Integrated Network Solutions segments, partially offset by growth in Government Communications Systems.
The company highlights increased operating income in Integrated Network Solutions, despite revenue declines, due to the absence of acquisition-related charges from the prior year, and continued growth in Government Communications Systems. The company also strengthened its liquidity position by establishing a new $1 billionc senior unsecured revolving credit facility and continued its share repurchase program, though at a lower pace than the previous year.
02—Key points
Key Highlights
- Reported a net loss of $85.8 million for the quarter, largely due to $222.3 million in impairment charges for discontinued operations (Broadcast Communications and CIS).
- Income from continuing operations was $128.5 million, a slight decrease from $131.1 million year-over-year.
- Diluted earnings per share from continuing operations increased to $1.14 from $1.09, driven by a reduction in outstanding shares.
- Total revenue decreased by 5.6% to $1,261.5 million, primarily due to lower sales in RF Communications and Integrated Network Solutions.
- RF Communications segment revenue declined 10.5%, while Government Communications Systems segment revenue grew 4.9%.
- Established a new $1 billion, five-year senior unsecured revolving credit facility, replacing previous credit arrangements.
- Net cash provided by operating activities increased significantly by 53.1% to $120.5 million, driven by improved cash collections in the RF Communications segment.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2013, L3HARRIS Technologies, Inc. lost $0.07.
- Revenue$1.26B100.0%
- Cost of revenue−$848.3M67.2%
- Gross profit$413.2M32.8%
- Operating costs−$284.7M22.6%
- Operating income$128.5M10.2%
- Interest, other & tax−$214.3M17.0%
- Net income−$85.8M6.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2013filed October 31, 2012Financial Statements
Q3 FY2013 against Q3 FY2012
| Line item | Q3 FY2013Q3 FY2012 | Change |
|---|---|---|
| Revenue | $1.26B$1.34B | −5.6% |
| Cost of Revenue | $848.30M$893.90M | −5.1% |
| Gross Profit | $413.20M$442.20M | −6.6% |
| Operating Expenses | $198.20M$223.40M | −11.3% |
| Operating Income | $128.50M$131.10M | −2.0% |
| Interest Expense | $27.90M$28.10M | −0.7% |
| Net Income | -$85.80M$121.60M | −170.6% |
| EPS (Basic) | $-0.77$1.01 | −176.2% |
| EPS (Diluted) | $-0.76$1.01 | −175.2% |
| Shares Outstanding (Basic) | 111.90M118.80M | −5.8% |
| Shares Outstanding (Diluted) | 112.60M119.40M | −5.7% |
05—Questions
Frequently Asked Questions
What caused the significant net loss in the current quarter?
The company reported a net loss of $85.8 million primarily due to substantial non-cash impairment charges totaling $222.3 million related to the planned divestiture of its Broadcast Communications business and the exit of its cyber integrated solutions operation (CIS). These are classified as discontinued operations.
How did the core business perform, excluding discontinued operations?
Excluding the impact of discontinued operations, income from continuing operations was $128.5 million, a slight decrease from $131.1 million in the same quarter last year. However, diluted earnings per share from continuing operations improved to $1.14 from $1.09, largely due to a reduction in the number of outstanding shares.
What are the key revenue trends across the business segments?
Total revenue decreased by 5.6% to $1,261.5 million. The RF Communications segment saw a 10.5% revenue decline, while the Integrated Network Solutions segment revenue decreased by 10.2%. In contrast, the Government Communications Systems segment experienced a 4.9% revenue increase.
What is the company's liquidity and financing position?
The company has maintained a strong liquidity position, ending the quarter with $326.8 million in cash and cash equivalents. They also established a new $1 billion senior unsecured revolving credit facility and continue to manage their capital structure through share repurchases and dividend payments.
06—Continue