Summary
Harris Corporation (now L3Harris Technologies, Inc.) filed its 10-Q for the period ending December 28, 2017. The report indicates a slight decrease in revenue for the quarter compared to the prior year, primarily driven by mixed performance across its segments, with Communication Systems showing strong growth while Electronic Systems and Space and Intelligence Systems experienced modest declines or remained flat. Despite the revenue fluctuations, the company managed to increase operating income year-over-year, showcasing improved operational efficiency and cost management. The company also reported a significant increase in net cash provided by operating activities, suggesting strong cash generation. Of note is the impact of the Tax Cuts and Jobs Act of 2017, which led to a significant adjustment in the company's deferred tax assets and a higher effective tax rate for the quarter. The company also continued its share repurchase program and maintained its quarterly dividend, signaling a commitment to returning capital to shareholders. Overall, the report paints a picture of a company navigating revenue challenges in certain segments while demonstrating operational resilience and strong cash flow generation.
Key Highlights
- 1Revenue for the quarter was $1.535 billion, a 6% increase compared to $1.449 billion in the prior year quarter, primarily driven by growth in Communication Systems and Electronic Systems segments.
- 2Income from continuing operations for the quarter was $139 million, a decrease from $163 million in the prior year quarter, impacted by a higher effective tax rate due to the Tax Cuts and Jobs Act.
- 3Operating income remained relatively stable at $272 million for the quarter, down slightly from $277 million in the prior year quarter, demonstrating cost management efforts.
- 4Net cash provided by operating activities significantly increased by 26% to $373 million for the first two quarters of fiscal 2018 compared to the same period in fiscal 2017.
- 5The company repurchased $150 million of its common stock in the first two quarters of fiscal 2018, continuing its capital return strategy.
- 6The Tax Cuts and Jobs Act of 2017 resulted in a $52 million write-down of deferred tax assets and an increase in the effective tax rate for the quarter.
- 7The company maintained its quarterly cash dividend, increasing it to $0.57 per share.