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L3Harris (LHX) Q1 Earnings Top Estimates, Revenues Fall Y/Y

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L3Harris Technologies, Inc.’s (LHX - Free Report) first-quarter 2022 adjusted earnings from continuing operations came in at $3.12 per share, which surpassed the Zacks Consensus Estimate of $3.02 by 3.3%. The bottom line however declined 1.9% from the year-ago quarter’s $3.18 per share due to a decline in revenues and margins.

Excluding one-time items, the company reported GAAP earnings of $2.44 per share compared with $2.25 in the year-ago quarter.

Total Revenues

In the quarter under review, the company’s revenues came in at $4,103 million, missing the Zacks Consensus Estimate of $4,123.3 million by 0.5%. Moreover, revenues declined 10.2% from the year-ago quarter’s $4,567 million.

The deceleration witnessed in the revenues in the reported quarter can be attributed to continued supply chain disruptions, award timing and airborne program transitions.

L3Harris Technologies Inc Price, Consensus and EPS Surprise

L3Harris Technologies Inc Price, Consensus and EPS Surprise

L3Harris Technologies Inc price-consensus-eps-surprise-chart | L3Harris Technologies Inc Quote

Segmental Performance

Starting from first-quarter 2022, L3Harris Technologies has three reportable segments:

Integrated Mission Systems: Net revenues in the segment came in at $1,721 million, down 2% year over year, on account of lower aircraft procurement and delivery volume.

Operating income improved 9% year over year to $255 million while operating margin expanded 140 basis points (bps) to 14.8%.

Space and Airborne Systems: The segment recorded net revenues of $1,450 million in the first quarter, down 0.6% year over year. This downside was driven by poor performance delivered by the airborne, Intel & Cyber as well as Mission Networks businesses.

Operating income decreased 10.44% to $172 million while operating margin contracted 130 bps to 11.9%.

Communication Systems: Net revenues in the segment declined 13.4% to $963 million on account of lower revenues from Tactical Communications and Broadband Communications.

Operating income declined 15.2% to $229 million. Operating margin contracted 50 bps to 23.8%.

Financial Position

As of Apr 1, 2022, L3Harris had $402 million in cash and cash equivalents compared with $941 million as of Dec 31, 2021.

Long-term debt as of Apr 1, 2022 was $6,795 million compared with $7,048 million as of Dec 31, 2021.

Net cash inflow from operating activities amounted to $39 million at the end of first-quarter 2022 compared with the year-ago cash inflow of $661 million.

2022 View

L3Harris reaffirmed its 2022 outlook. It still expects to generate revenues of $17.5 billion in 2022. The Zacks Consensus Estimate for revenues, pegged at $17.55 billion, is slightly higher than the guided figure.

Earnings in 2022 are also still expected to be in the range of $13.35-$13.65 per share. The Zacks Consensus Estimate for EPS, pegged at $13.57, lies above the midpoint of the 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

Raytheon Technologies’ (RTX - Free Report) first-quarter 2022 adjusted earnings per share (EPS) of $1.15 beat the Zacks Consensus Estimate of $1.01 by 13.9%. Moreover, the bottom-line figure improved 27.8% from the year-ago quarter’s adjusted earnings of 90 cents.

Raytheon’s first-quarter sales of $15,716 million missed the Zacks Consensus Estimate of $15,799 million by 0.5%. The sales figure, however, rose 3% from $15,251 million recorded in the year-ago quarter.

Lockheed Martin (LMT - Free Report) reported first-quarter 2022 earnings of $6.44 per share, which surpassed the Zacks Consensus Estimate of $6.22 by 3.5%. The bottom line however declined 1.8% year over year.

Lockheed Martin’s  net sales amounted to $14.96 billion, which missed the Zacks Consensus Estimate of $15.53 billion by 3.7%. The top line also declined 8% from $16.26 billion reported in the year-ago quarter

Teledyne Technologies Inc. (TDY - Free Report) reported first-quarter 2022 adjusted earnings of $4.27 per share, which surpassed the Zacks Consensus Estimate of $4.09 by 4.4%. The bottom line also improved 33.9% from the year-ago quarter’s $3.19 per share.

Teledyne’s total sales in the first quarter amounted to $1,321 million, which exceeded the Zacks Consensus Estimate of $1,315 million by 0.5%. The top line also improved 64% from $805.7 million reported a year ago.