01—Abstract
Summary
Summary of the 10-Q filed April 24, 2025. Cited figures are marked; the original filing is the authoritative source.
L3Harris Technologies, Inc. reported its first quarter 2025 results, showing a net income of $386 milliona, or $2.04 per diluted share, a significant increase from $285 million, or $1.48 per diluted share, in the prior year's first quarter.
This earnings growth was driven by a reduction in General and Administrative (G&A) expenses, which fell by $145 millionb, largely due to lower LHX NeXt implementation costs. Revenue for the quarter was $5.132 billion, a slight decrease from $5.211 billion in Q1 2024, influenced by lower product revenues in the Space & Airborne Systems (SAS) and Integrated Mission Systems (IMS) segments, partially offset by growth in Communication Systems (CS) and Aerojet Rocketdyne (AR). The company also completed the divestiture of its Commercial Aviation Solutions (CAS) disposal group on March 28, 2025, generating $831 million in cash proceeds.
This strategic move, coupled with a business realignment transferring the Fuzing and Ordnance business from IMS to AR, aims to streamline operations. Despite a slight year-over-year revenue dip, the improved profitability and successful divestiture demonstrate management's focus on cost control and portfolio optimization.
02—Key points
Key Highlights
- Net income increased to $386 million in Q1 2025 from $285 million in Q1 2024, with diluted EPS rising to $2.04 from $1.48.
- Total revenue slightly decreased to $5.132 billion from $5.211 billion, primarily due to lower product sales in SAS and IMS segments.
- General and Administrative (G&A) expenses decreased by $145 million, significantly driven by lower LHX NeXt implementation costs.
- Completed the divestiture of the Commercial Aviation Solutions (CAS) disposal group on March 28, 2025, receiving $831 million in net cash proceeds.
- The company executed a business realignment, transferring its Fuzing and Ordnance (FOS) business from IMS to AR.
- Ending backlog remained strong at $33.2 billion as of March 28, 2025.
- The company repurchased $569 million of its common stock in Q1 2025, indicating continued capital return to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, L3HARRIS Technologies, Inc. kept $0.08.
- Revenue$5.13B100.0%
- Cost of revenue−$3.78B73.7%
- Gross profit$1.35B26.3%
- Operating costs−$825.0M16.1%
- Operating income$525.0M10.2%
- Interest, other & tax−$139.0M2.7%
- Net income$386.0M7.5%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 24, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $5.13B$5.21B | −1.5% |
| Cost of Revenue | $3.78B$3.86B | −2.1% |
| Gross Profit | $1.35B$1.35B | +0.1% |
| SG&A Expenses | $825.00M$970.00M | −14.9% |
| Operating Income | $525.00M$378.00M | +38.9% |
| Net Income | $386.00M$283.00M | +36.4% |
| EPS (Basic) | $2.05$1.49 | +37.6% |
| EPS (Diluted) | $2.04$1.48 | +37.8% |
| Shares Outstanding (Basic) | 188.50M189.80M | −0.7% |
| Shares Outstanding (Diluted) | 189.10M190.80M | −0.9% |
05—Questions
Frequently Asked Questions
What was the primary driver for the increase in net income?
The primary driver for the increase in net income was a significant reduction in General and Administrative (G&A) expenses, which fell by $145 million compared to the prior year's first quarter. This reduction was largely attributed to lower LHX NeXt implementation costs, including decreased employee severance and third-party consulting expenses.
What is the impact of the CAS disposal group sale on the company's financials?
The sale of the CAS disposal group on March 28, 2025, generated $831 million in cash proceeds, which positively impacted the company's investing activities. While the divestiture resulted in a pre-tax loss of $17 million recognized in the first quarter, it is part of a strategic effort to streamline the company's portfolio and focus on core defense and aerospace operations.
How did the business segment performance vary in the first quarter of 2025?
Revenue saw mixed performance across segments. Communication Systems (CS) revenue increased by 4%, while Integrated Mission Systems (IMS) revenue decreased by 2%, and Space & Airborne Systems (SAS) revenue decreased by 8%. Aerojet Rocketdyne (AR) revenue saw an 8% increase. Operating income improved in CS and IMS, remained relatively flat in AR, and decreased in SAS, notably impacted by unfavorable Estimate at Completion (EAC) adjustments on classified development programs.
What is the company's liquidity position and outlook?
L3Harris maintains a strong liquidity position with $517 million in cash and cash equivalents as of March 28, 2025. The company has available borrowing capacity under its credit facilities and expects its existing cash, operational cash flows, and access to capital markets to be sufficient for its anticipated needs over the next 12 months and beyond. They also completed a business realignment and secured new credit facilities totaling $3.0 billion.
06—Continue