Summary
L3Harris Technologies, Inc. (LHX) reported solid revenue growth in its second quarter and first half of 2023, driven by increases across all operating segments. Revenue for the quarter ended June 30, 2023, was $4.7 billion, an increase of 13% year-over-year, and for the first half, revenue reached $9.2 billion, up 11% year-over-year. This growth was largely fueled by strong performance in the Communication Systems (CS) segment, bolstered by the recent acquisition of Viasat's Tactical Data Links (TDL) product line, which contributed significantly to the segment's revenue and operating income. Despite increased revenues, net income and diluted EPS saw a decline compared to the prior year, primarily due to higher interest expenses related to new debt facilities and increased costs associated with engineering, selling, and administrative activities, including acquisition-related expenses. Operationally, the company continues to navigate a dynamic market, with a significant portion of revenue derived from U.S. Government contracts. The pending acquisition of Aerojet Rocketdyne Holdings, Inc. (AJRD) is a major strategic development, expected to close shortly after the reporting period, pending FTC approval. The company also completed the divestiture of its Visual Information Solutions (VIS) business. Management is focused on integrating acquisitions, managing costs, and navigating the economic environment, including inflation and interest rate changes, while maintaining a strong liquidity position.
Financial Highlights
52 data points| Revenue | $4.69B |
| Cost of Revenue | $3.51B |
| Gross Profit | $1.19B |
| SG&A Expenses | $787.00M |
| Operating Income | $400.00M |
| Net Income | $349.00M |
| EPS (Basic) | $1.84 |
| EPS (Diluted) | $1.83 |
| Shares Outstanding (Basic) | 189.20M |
| Shares Outstanding (Diluted) | 190.10M |
Key Highlights
- 1Revenue increased by 13% to $4.7 billion for the quarter and 11% to $9.2 billion for the first half of 2023, driven by growth in all segments.
- 2The Communication Systems (CS) segment saw a significant 30% revenue increase for the quarter, partly due to the acquisition of Viasat's TDL product line.
- 3Net income attributable to L3Harris decreased to $349 million for the quarter and $686 million for the first half, down from $471 million and $946 million, respectively, year-over-year.
- 4Diluted EPS also declined to $1.83 for the quarter and $3.60 for the first half, from $2.42 and $4.86 in the comparable periods last year.
- 5Interest expense increased significantly due to new debt facilities, particularly the $2.25 billion Term Loan 2025 used to fund acquisitions.
- 6The company successfully divested its Visual Information Solutions (VIS) business for $71 million in net proceeds, recognizing a pre-tax gain of $26 million.
- 7L3Harris is nearing the completion of its acquisition of Aerojet Rocketdyne Holdings, Inc. (AJRD), with regulatory approval indicating a closing expected shortly after the reporting period.