01—Abstract
Summary
Summary of the 10-Q filed October 31, 2017. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. (LHX) reported its third-quarter 2017 financial results, showing a slight decrease in revenue from $1.42 billion in the prior year's quarter to $1.41 billiona.
However, the company demonstrated improved profitability, with operating income increasing by 11% to $272 millionb and income from continuing operations up by 15% to $167 million. This translated to a 19% increase in diluted earnings per share (EPS) from continuing operations, rising to $1.38 from $1.16 year-over-year. The company's strategic focus on technology-differentiated, high-margin businesses is evident, supported by the divestiture of non-core segments.
The balance sheet remains robust, with total assets and liabilities largely stable quarter-over-quarter, and shareholders' equity showing a modest increase. Cash flow from operations significantly improved, more than doubling to $95 millionc, indicating strong operational cash generation. The company also continued to return capital to shareholders through share repurchases and dividend payments, with an increase in the quarterly dividend rate.
02—Key points
Key Highlights
- Revenue remained stable at $1.41 billion, a slight decrease from $1.42 billion in the prior year's quarter.
- Operating income saw a healthy increase of 11% to $272 million, with operating margin improving to 19% from 17%.
- Income from continuing operations rose by 15% to $167 million, demonstrating improved profitability.
- Diluted earnings per share (EPS) from continuing operations increased significantly by 19% to $1.38 from $1.16.
- Net cash provided by operating activities more than doubled, increasing by 121% to $95 million.
- The company increased its quarterly cash dividend rate to $0.57 per share, marking its sixteenth consecutive annual increase.
- The balance sheet reflects a solid financial position with $2.13 billion in current assets and $2.99 billion in total shareholders' equity.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2018, L3HARRIS Technologies, Inc. kept $0.12.
- Revenue$1.41B100.0%
- Cost of revenue−$919.0M65.2%
- Gross profit$491.0M34.8%
- Operating costs−$219.0M15.5%
- Operating income$272.0M19.3%
- Interest, other & tax−$107.0M7.6%
- Net income$165.0M11.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2018filed October 31, 2017Financial Statements
Q3 FY2018 against Q3 FY2017
| Line item | Q3 FY2018Q3 FY2017 | Change |
|---|---|---|
| Revenue | $1.41B$1.42B | −0.7% |
| Cost of Revenue | $919.00M$897.00M | +2.5% |
| Gross Profit | $491.00M$523.00M | −6.1% |
| Operating Expenses | $268.00M$277.00M | −3.2% |
| Operating Income | $272.00M$246.00M | +10.6% |
| Interest Expense | $41.00M$44.00M | −6.8% |
| Net Income | $165.00M$160.00M | +3.1% |
| EPS (Basic) | $1.33$1.29 | +3.1% |
| EPS (Diluted) | $1.31$1.27 | +3.1% |
| Shares Outstanding (Basic) | 119.10M123.90M | −3.9% |
| Shares Outstanding (Diluted) | 121.20M125.50M | −3.4% |
05—Questions
Frequently Asked Questions
How did L3Harris's revenue perform in the third quarter of fiscal 2017 compared to the prior year?
L3Harris's revenue was largely stable, showing a slight decrease of approximately 0.5% from $1.42 billion in the third quarter of fiscal 2016 to $1.41 billion in the third quarter of fiscal 2017.
What was the trend in L3Harris's profitability during this period?
The company demonstrated strong profitability improvements. Operating income increased by 11% to $272 million, and income from continuing operations grew by 15% to $167 million. This led to a significant 19% increase in diluted earnings per share (EPS) from continuing operations, reaching $1.38.
How did the company manage its cash flows?
Cash flow from operations significantly improved, more than doubling to $95 million in the third quarter of fiscal 2017, compared to $43 million in the same period last year. This robust operating cash generation indicates effective working capital management and operational efficiency.
What actions did L3Harris take regarding shareholder returns?
L3Harris continued its commitment to returning capital to shareholders. They repurchased approximately $75 million worth of common stock during the quarter and increased their quarterly cash dividend to $0.57 per share, marking their sixteenth consecutive annual increase.
06—Continue