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Apr 03, 2020
L3Harris Q1 2020 Earnings Report
L3Harris reported first quarter results and updated its outlook.
Key Takeaways
L3Harris Technologies reported a revenue of $4.6 billion, up 5% versus prior-year pro forma. GAAP EPS was $0.99 and non-GAAP EPS was $2.80. Net income was $194 million. The company has updated its 2020 outlook to reflect pandemic-related risks primarily in commercial aerospace.
1Q20 revenue $4.6 billion, up 5% versus prior-year pro forma, funded book-to-bill of 1.11.
1Q20 GAAP earnings per share from continuing operations (EPS) of $0.99, down 43% versus prior-year pro forma.
1Q20 non-GAAP EPS of $2.80, up 21% versus prior-year adjusted pro forma.
1Q20 operating cash flow of $533 million; adjusted free cash flow of $533 million.
Revenue by Segment
Forward Guidance
L3Harris updated its guidance for 2020 to reflect current expectations and assumptions regarding COVID-19-related risks:
Positive Outlook
- GAAP net income margin of 8.2% - 8.5% and adjusted EBIT margin of 17.4% - 17.6% (expanded at upper end of previous range of 17.0% - 17.5%)
- Operating cash flow and adjusted free cash flow unchanged at $2.8 - $2.9 billion and $2.6 - $2.7 billion, respectively
- ~$1.7 billion in share repurchases, inclusive of proceeds from divestitures announced year-to-date
Challenges Ahead
- Revenue in a range of $18.3 billion - $18.6 billion, up organically 3% - 5% on an adjusted pro forma basis (reduced from previous range of up 5% - 7%); primarily reflects downturn in commercial aerospace business, as well as some weakness in international and public safety demand and risks from supply chain disruptions
- GAAP EPS of $6.95 - $7.35 and non-GAAP EPS of $11.15 - $11.55 (reduced from previous guidance of $8.35 - $8.75 GAAP and $11.35 - $11.75 non-GAAP)
Historical Earnings Impact
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Avg. Return Before/After Earnings
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