01—Abstract
Summary
Summary of the 10-Q filed January 29, 2014. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. (LHX) reported its financial results for the quarter and two quarters ended December 27, 2013.
For the quarter, revenue decreased by 4.9% to $1.22 billiona compared to the prior year quarter, and income from continuing operations was $137.1 million, a slight decrease from $138.5 million in the same period last year. Diluted earnings per share from continuing operations saw a modest increase to $1.27. The company generated solid operating cash flow, reflecting effective cost management and operational improvements, partly due to restructuring actions from the prior year.
Segment performance showed mixed results, with RF Communications and Integrated Network Solutions experiencing revenue declines, while Government Communications Systems saw a slight revenue increase. The company continued its commitment to shareholder returns through share repurchases and an increased quarterly dividend. Despite revenue headwinds in certain segments, L3Harris maintained strong liquidity and a solid financial position, with ample availability under its revolving credit facility and no significant debt maturities in the near term.
02—Key points
Key Highlights
- Revenue for the quarter ended December 27, 2013, decreased by 4.9% to $1.22 billion compared to the same period last year.
- Income from continuing operations for the quarter was $137.1 million, a decrease of 1.0% year-over-year.
- Diluted earnings per share from continuing operations increased by 1.6% to $1.27 for the quarter.
- Net cash provided by operating activities remained strong at $279.5 million for the first two quarters of fiscal 2014, consistent with the prior year.
- RF Communications segment revenue decreased by 6.5% in the quarter, while Government Communications Systems segment revenue increased by 1.1%.
- The company repurchased $150.0 million of common stock during the first two quarters of fiscal 2014.
- The quarterly cash dividend rate was increased to $0.42 per share, representing the twelfth consecutive annual increase.
03—Questions
Frequently Asked Questions
What was the primary driver for the decrease in revenue during the quarter?
The primary driver for the revenue decrease was lower sales in the RF Communications segment, due to reduced revenue from U.S. Department of Defense customers and lower Public Safety and Professional Communications revenue. The Integrated Network Solutions segment also contributed to the decline with reduced revenue from U.S. Government customers.
How did discontinued operations impact net income?
Discontinued operations had a negative impact on net income. For the quarter ended December 27, 2013, discontinued operations resulted in a net loss of $1.0 million, primarily related to adjustments for contingencies on the sale of Broadcast Communications. This is a significant improvement compared to the $93.7 million loss from discontinued operations in the prior year quarter, which included substantial impairment charges.
What is the company's liquidity position?
L3Harris maintained a strong liquidity position. As of December 27, 2013, the company had $334.4 million in cash and cash equivalents. They also had an available $1 billion revolving credit facility, with approximately $890 million available. The company does not anticipate any material issues with liquidity.
What are the key factors influencing the company's effective tax rate?
The effective tax rate was 32.6% for the quarter ended December 27, 2013. The rate benefited from a refund resulting from the consolidation of foreign subsidiaries. In the prior year quarter, the effective tax rate benefited from confirmation of certain acquired tax attributes due to an audit resolution.
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