01—Abstract
Summary
Summary of the 10-Q filed January 30, 2013. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. (LHX) reported its financial results for the quarter ending December 28, 2012.
Total revenue for the quarter was $1,286.9 milliona, a slight decrease of 1.8% compared to the same period in the previous year. Despite the revenue dip, income from continuing operations saw a positive increase of 2.7% to $138.5 million, leading to a diluted earnings per share of $1.25, up from $1.18 year-over-year. The company continued its strategic divestiture of non-core assets, with the sale of Broadcast Communications expected to close in early 2013.
This divestiture, along with the exit from cyber integrated solutions, led to significant charges related to discontinued operations, resulting in a net loss for the current reporting period. However, excluding these items, the core business demonstrated operational resilience with improved profitability.
02—Key points
Key Highlights
- Revenue for the quarter was $1,286.9 million, a 1.8% decrease compared to the prior year's quarter.
- Income from continuing operations increased by 2.7% to $138.5 million.
- Diluted earnings per share from continuing operations rose to $1.25 from $1.18 in the prior year's quarter.
- The company recorded a significant loss from discontinued operations due to asset write-downs related to the sale of Broadcast Communications.
- The RF Communications segment saw a revenue decrease of 7.6%, while Government Communications Systems revenue increased by 3.9%.
- Integrated Network Solutions segment revenue grew by 2.8%, with significant operating income growth of 66.2%.
- Net cash provided by operating activities remained strong at $279.5 million for the first two quarters of the fiscal year.
03—Questions
Frequently Asked Questions
What caused the net loss in the current quarter despite improved income from continuing operations?
The net loss reported for the quarter is primarily due to significant charges related to discontinued operations, specifically the impairment of assets associated with the planned divestiture of Broadcast Communications. These one-time charges do not reflect the performance of the ongoing business.
How did the company's different segments perform?
The RF Communications segment experienced a revenue decline, mainly due to lower Tactical Communications revenue. The Government Communications Systems segment showed growth driven by key weather and space programs. The Integrated Network Solutions segment also grew, boosted by Harris CapRock Communications and Healthcare Solutions, despite a decline in IT Services revenue.
What is the company's liquidity position?
L3Harris Technologies maintained a strong liquidity position with $328.1 million in cash and cash equivalents at the end of the quarter. The company has a $1 billion revolving credit facility and expects sufficient resources to cover its working capital, capital expenditures, and other obligations for the foreseeable future.
What is the status of the Broadcast Communications divestiture?
The company entered into a definitive Asset Sale Agreement for Broadcast Communications in December 2012, with the transaction expected to close in early calendar year 2013. This divestiture is part of a broader strategy to exit non-core operations.
04—Continue