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Dec 29, 2023
L3Harris Q4 2023 Earnings Report
L3Harris reported a revenue increase of 17% driven by acquisitions and organic growth, with a segment operating margin expansion of 50 bps. EPS decreased due to impairment charges, while non-GAAP EPS increased by 2%. The company also delivered record backlog.
Key Takeaways
L3Harris Technologies reported a 17% increase in fourth-quarter revenue, driven by the acquisitions of Aerojet Rocketdyne and Tactical Data Links, as well as organic growth in Space & Airborne Systems and Communication Systems segments. The company's operating margin decreased due to impairment associated with the pending sale of the Commercial Aviation Solutions business. Non-GAAP EPS increased by 2% due to higher segment operating income and a lower effective tax rate.
Fourth quarter revenue increased 17%, driven by acquisitions and organic growth.
Operating margin decreased due to impairment charges related to the pending sale of the Commercial Aviation Solutions business.
Segment operating margin expanded 50 bps to 15.1% due to efficiencies and favorable product mix.
Non-GAAP EPS increased 2% driven by higher segment operating income and a lower effective tax rate.
Revenue by Segment
Forward Guidance
L3Harris initiated its 2024 guidance, expecting revenue between $20.7B - $21.3B and non-GAAP EPS between $12.40 - $12.80.
Positive Outlook
- Revenue between $20.7B - $21.3B
- Segment operating margin of ~15%
- Free cash flow of ~$2.2B
- Non-service FAS pension income of ~$260 million
- Effective tax rate on non-GAAP income of 13.0% - 13.5%
Challenges Ahead
- Net interest expense of ~$650 million
- Average diluted shares flat - up slightly
- Capital expenditures of ~2% sales
- Unspecified items impacting GAAP results
- Variability of adjustments may have unpredictable impact on future GAAP results
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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