Summary
L3Harris Technologies, Inc. reported solid financial performance for the quarter ended April 2, 2021, with a notable increase in income from continuing operations driven by strong performance across most segments and a significant reduction in impairment charges compared to the prior year. Total revenue saw a slight decrease of 1% year-over-year, primarily impacted by the divestiture of the airport security and automation business and ongoing effects of the commercial aviation downturn in the Aviation Systems segment. However, this was offset by growth in Integrated Mission Systems, Space and Airborne Systems, and Communication Systems. The company demonstrated strong operational execution, leading to an improvement in gross margin and efficiency. A substantial decrease in "Impairment of goodwill and other assets" compared to the prior year, which was heavily impacted by COVID-19, significantly boosted profitability. L3Harris also continued its commitment to shareholder returns through significant share repurchases and an increased dividend, underscoring its financial strength and confidence in future performance. The company's strategic divestitures are progressing as planned, indicating a focus on optimizing its portfolio.
Financial Highlights
52 data points| Revenue | $4.57B |
| Cost of Revenue | $3.21B |
| Gross Profit | $1.35B |
| SG&A Expenses | $801.00M |
| Operating Income | $469.00M |
| Interest Expense | $69.00M |
| Net Income | $468.00M |
| EPS (Basic) | $2.26 |
| EPS (Diluted) | $2.25 |
| Shares Outstanding (Basic) | 206.70M |
| Shares Outstanding (Diluted) | 208.50M |
Key Highlights
- 1Total revenue decreased slightly by 1% to $4,567 million, primarily due to divestitures and the commercial aviation market downturn, but was partially offset by growth in other segments.
- 2Income from continuing operations increased by 139% to $467 million, significantly aided by a substantial reduction in impairment charges compared to the prior year.
- 3Diluted earnings per share (EPS) from continuing operations rose by 127% to $2.25, reflecting improved profitability and a reduction in outstanding shares due to buybacks.
- 4Gross margin improved to 30% from 29% year-over-year, driven by integration benefits and operational efficiencies.
- 5The company repurchased $700 million of its common stock during the quarter, demonstrating a commitment to returning capital to shareholders.
- 6L3Harris is actively managing its portfolio, with definitive agreements signed for the divestiture of the CPS business, Military Training business, and VSE disposal group, expected to close in the second half of 2021.