Summary
L3Harris Technologies, Inc. reported strong revenue growth for the quarter ended July 3, 2020, primarily driven by the inclusion of L3 operations following the L3Harris Merger in June 2019. While "as reported" revenue surged by 138% year-over-year, the "pro forma" revenue remained flat, indicating that the core business operations were stable. Despite the revenue increase, net income from continuing operations saw a slight increase of 3% on an "as reported" basis, but a significant decrease of 33% on a "pro forma" basis. This divergence highlights the impact of the merger and operational adjustments. The company also experienced goodwill impairments, particularly in its Commercial Aviation Solutions sector due to the COVID-19 pandemic's impact on air travel, leading to significant charges. The balance sheet shows a robust cash position, bolstered by operating activities and proceeds from business sales, alongside a substantial long-term debt load, much of which was assumed in the merger. The company continues to manage its debt and capital structure, including share repurchases and dividend payments.
Financial Highlights
53 data points| Revenue | $4.45B |
| Cost of Revenue | $3.17B |
| Gross Profit | $1.27B |
| SG&A Expenses | $855.00M |
| Operating Income | $501.00M |
| Interest Expense | $68.00M |
| Net Income | $278.00M |
| EPS (Basic) | $1.31 |
| EPS (Diluted) | $1.30 |
| Shares Outstanding (Basic) | 215.90M |
| Shares Outstanding (Diluted) | 217.80M |
Key Highlights
- 1Revenue significantly increased by 138% on an 'as reported' basis to $4.4 billion in Q2 2020 compared to Q2 2019, largely due to the L3 merger.
- 2Pro forma revenue remained flat, indicating stability in the combined business operations.
- 3Income from continuing operations saw a slight 3% increase on an 'as reported' basis but a 33% decrease on a 'pro forma' basis, reflecting merger impacts and other charges.
- 4The company recorded significant goodwill and other asset impairments totaling $70 million for the quarter and $394 million for the year-to-date, primarily related to the Commercial Aviation Solutions sector due to COVID-19 impacts.
- 5Cash and cash equivalents increased substantially to $1.95 billion, driven by strong operating cash flow and proceeds from business divestitures.
- 6Long-term debt remains substantial at $6.27 billion, with the majority assumed from the L3 merger.
- 7The company continues to execute its capital allocation strategy, including share repurchases and dividend payments, while managing its debt structure.