L3Harris Technologies, Inc.’s (LHX - Free Report) first-quarter 2021 adjusted earnings came in at $3.18 per share, which surpassed the Zacks Consensus Estimate of $2.92. The bottom line also increased 13.6% from the year-ago quarter’s $2.80.
Including one-time items, the company reported GAAP earnings of $2.25 per share compared with the year-ago quarter’s 99 cents.
This year-over-year upside in earnings was driven by operational excellence, integration benefits and a lower share count, net of COVID and divestiture-related impacts.
Total Revenues
During the reported quarter, the company’s revenues came in at $4,567 million, exceeding the Zacks Consensus Estimate of $4,550 million. However, revenues edged down 1.3% on a year-over-year basis, due to divestitures and COVID-related impacts within the commercial businesses.
Segmental Performance
Integrated Mission Systems: Net sales at the segment came in at $1,451 million, up 5.9% on growth in Maritime, driven by the ramp-up on manned platforms, and in ISR from a newly-awarded NATO program, with moderate growth in Electro Optical.
Operating income came in at $240 million compared with the year-ago quarter’s $101 million. Moreover, operating margin expanded 180 basis points (bps) to 16.5%.
Space and Airborne Systems: The segment recorded net sales of $1,236 million in the first quarter, up 3.7% year over year. This upside resulted from the ramp-up of missile defense and other responsive programs on the Space and the F-35 platform in Mission Avionics, as well as classified growth in Intel and Cyber.
Operating income increased to $240 million from the $221 million registered in the year-ago quarter. Operating margin expanded 90 bps to 19.4%.
Communication Systems: Net sales at the segment inched up 1.6% to $1,112 million. This year-over-year growth was aided by the ramp-up in U.S. DoD modernization programs in Tactical Communications.
Operating income increased to $281 million from the year-ago quarter’s $250 million. Operating margin expanded 240 bps to 25.3%.
Aviation Systems: Net sales at the segment came in at $814 million, down 19% year over year. This decline was due to the divestiture of the airport security and automation business, COVID-related impacts in the commercial aviation business and program timing in military training.
Operating income increased to $128 million from $147 million in the year-ago quarter. Operating margin expanded 120 bps to 15.7%.
L3Harris Technologies Inc Price, Consensus and EPS Surprise
Financial Position
As of Apr 2, 2021, L3Harris had $976 million in cash and cash equivalents compared with $1,276 million as of Jan 1, 2021.
Long-term debt as of Apr 2, 2021, was $7,066 million compared with $6,943 million as of Jan 1, 2021.
Net cash inflow from operating activities amounted to $661 million at the end of first-quarter 2021 compared with the year-ago cash inflow of $533 million.
During the January-March quarter, L3Harris generated $630 million in adjusted free cash flow and returned $909 million to shareholders through $700 million in share repurchases and $209 million in dividends.
2021 View
L3Harris currently expects to generate revenues of $18.5-$18.9 billion, up organically 3-5%, during 2021. The Zacks Consensus Estimate for revenues, pegged at $18.81 billion, lies above the mid-point of the company’s guided range.
The ongoing-year earnings are now projected at $12.70-$13.00 per share, up from the previous guidance of $12.60-$13.00. The Zacks Consensus Estimate for EPS, pegged at $12.90, lies above the mid-point of the company’s guided range.
Zacks Rank
L3Harris currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Lockheed Martin Corp. (LMT - Free Report) delivered first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2021 loss of 10 cents per share, narrower than the Zacks Consensus Estimate of a loss of 16 cents.
Raytheon Technologies Corporation’s (RTX - Free Report) first-quarter 2021 adjusted earnings per share of 90 cents outpaced the Zacks Consensus Estimate of 88 cents.
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Zacks Names "Single Best Pick to Double"
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Free: See Our Top Stock and 4 Runners Up >>
L3Harris Technologies, Inc.’s (LHX - Free Report) first-quarter 2021 adjusted earnings came in at $3.18 per share, which surpassed the Zacks Consensus Estimate of $2.92. The bottom line also increased 13.6% from the year-ago quarter’s $2.80.
Including one-time items, the company reported GAAP earnings of $2.25 per share compared with the year-ago quarter’s 99 cents.
This year-over-year upside in earnings was driven by operational excellence, integration benefits and a lower share count, net of COVID and divestiture-related impacts.
Total Revenues
During the reported quarter, the company’s revenues came in at $4,567 million, exceeding the Zacks Consensus Estimate of $4,550 million. However, revenues edged down 1.3% on a year-over-year basis, due to divestitures and COVID-related impacts within the commercial businesses.
Segmental Performance
Integrated Mission Systems: Net sales at the segment came in at $1,451 million, up 5.9% on growth in Maritime, driven by the ramp-up on manned platforms, and in ISR from a newly-awarded NATO program, with moderate growth in Electro Optical.
Operating income came in at $240 million compared with the year-ago quarter’s $101 million. Moreover, operating margin expanded 180 basis points (bps) to 16.5%.
Space and Airborne Systems: The segment recorded net sales of $1,236 million in the first quarter, up 3.7% year over year. This upside resulted from the ramp-up of missile defense and other responsive programs on the Space and the F-35 platform in Mission Avionics, as well as classified growth in Intel and Cyber.
Operating income increased to $240 million from the $221 million registered in the year-ago quarter. Operating margin expanded 90 bps to 19.4%.
Communication Systems: Net sales at the segment inched up 1.6% to $1,112 million. This year-over-year growth was aided by the ramp-up in U.S. DoD modernization programs in Tactical Communications.
Operating income increased to $281 million from the year-ago quarter’s $250 million. Operating margin expanded 240 bps to 25.3%.
Aviation Systems: Net sales at the segment came in at $814 million, down 19% year over year. This decline was due to the divestiture of the airport security and automation business, COVID-related impacts in the commercial aviation business and program timing in military training.
Operating income increased to $128 million from $147 million in the year-ago quarter. Operating margin expanded 120 bps to 15.7%.
L3Harris Technologies Inc Price, Consensus and EPS Surprise
Financial Position
As of Apr 2, 2021, L3Harris had $976 million in cash and cash equivalents compared with $1,276 million as of Jan 1, 2021.
Long-term debt as of Apr 2, 2021, was $7,066 million compared with $6,943 million as of Jan 1, 2021.
Net cash inflow from operating activities amounted to $661 million at the end of first-quarter 2021 compared with the year-ago cash inflow of $533 million.
During the January-March quarter, L3Harris generated $630 million in adjusted free cash flow and returned $909 million to shareholders through $700 million in share repurchases and $209 million in dividends.
2021 View
L3Harris currently expects to generate revenues of $18.5-$18.9 billion, up organically 3-5%, during 2021. The Zacks Consensus Estimate for revenues, pegged at $18.81 billion, lies above the mid-point of the company’s guided range.
The ongoing-year earnings are now projected at $12.70-$13.00 per share, up from the previous guidance of $12.60-$13.00. The Zacks Consensus Estimate for EPS, pegged at $12.90, lies above the mid-point of the company’s guided range.
Zacks Rank
L3Harris currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Lockheed Martin Corp. (LMT - Free Report) delivered first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32.
Hexcel Corporation (HXL - Free Report) reported first-quarter 2021 loss of 10 cents per share, narrower than the Zacks Consensus Estimate of a loss of 16 cents.
Raytheon Technologies Corporation’s (RTX - Free Report) first-quarter 2021 adjusted earnings per share of 90 cents outpaced the Zacks Consensus Estimate of 88 cents.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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