Will IMS Unit's Poor Performance Hit L3Harris Technologies Q2 Earnings?

L3Harris Technologies, Inc. LHX is slated to report second-quarter 2025 results on July 24, 2025, before market open.

It has a trailing four-quarter average earnings surprise of 2.27%. The strong top-line performance across three of the company’s four business segments is likely to have boosted earnings amid low non-cash non-service FAS pension income. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

LHX’s IMS Unit Reflects Weak Performance

Lower aircraft missionization volume and planned mission support program ramp down are likely to have hurt the Integrated Mission Systems (“IMS”) segment’s quarterly top-line performance.

The Zacks Consensus Estimate for IMS’ second-quarter revenues is currently pegged at $1,581.9 million, which indicates a decline of 8.5% from the year-ago quarter’s figure.

L3Harris Technologies Inc Price and EPS Surprise

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

LHX’s Communication Systems to Boost Revenues

Higher sales volume, driven by strong international demand for resilient communication equipment, is expected to have boosted the Communication Systems unit’s top-line performance.

The Zacks Consensus Estimate for this unit’s revenues is pegged at $1,387.3 million, which implies growth of 3.1% from the prior-year quarter’s figure.

Aerojet Rocketdyne’s Performance

Higher sales from the Missile Solutions unit, backed by increased production volume for key missile and munitions programs and new program ramp, are likely to have boosted the AR segment’s revenues in the second quarter.

The Zacks Consensus Estimate for this unit’s revenues is pegged at $662.4 million, which implies growth of 14% from the prior-year quarter’s reported figure.

Space and Airborne Systems’ Performance

Strong sales growth from the Missions Networks program is likely to have added impetus to the Space and Airborne Systems (“SAS”) unit’s revenues.

However, the adverse impact of the divestiture of this unit’s antenna business in the second quarter of 2024, lower F-35-related volumes and reduced volumes from the Space Systems unit are likely to have partially affected the SAS segment’s top-line performance.

The Zacks Consensus Estimate for this unit’s revenues is pegged at $1,737.3 million, which indicates growth of 1.8% from the year-ago quarter’s number.

Q2 Estimates for LHX Stock

With solid revenue growth expected in three of its four segments, LHX is projected to report modest top-line growth, although a significant decline in its IMS unit may weigh on its overall performance.

The Zacks Consensus Estimate for LHX’s second-quarter sales is pegged at $5.30 billion, which indicates growth of 0.1% from the prior-year quarter’s reported figure.

Poor operating margin performance expected in LHX’s IMS, SAS and AR business segments, along with unfavorable non-cash non-service FAS pension income and sales performance, might have adversely impacted LHX’s second-quarter bottom line.

The consensus estimate for earnings is pegged at $2.48 per share, which implies a decline of 23.5% from the year-ago quarter’s level.

What the Zacks Model Unveils for LHX Stock

Our proven model predicts an earnings beat for L3Harris Technologies this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here, as you will see below.

LHX’s Earnings ESP: L3Harris has an Earnings ESP of +0.46%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

LHX’s Zacks Rank: Currently, LHX carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Below, we have mentioned a few other players from the same industry that have the right combination of elements to beat on earnings in the upcoming releases:

General Dynamics GD is set to report second-quarter 2025 earnings on July 23, 2025, before market open. It has an Earnings ESP of +1.51% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for GD’s earnings is pegged at $3.59 per share, implying an improvement of 10.1% from the prior-year quarter’s reported figure. The consensus estimate for sales is pegged at $12.35 billion, indicating year-over-year growth of 3.1%.

Textron TXT is set to report second-quarter 2025 results on July 24, 2025. It has an Earnings ESP of +0.53% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for TXT’s earnings is pegged at $1.45 per share. The consensus estimate for sales is pegged at $3.63 billion, indicating year-over-year growth of 2.9%.

A Recent Industry Release

GE Aerospace GE reported second-quarter adjusted earnings of $1.66 per share, which beat the Zacks Consensus Estimate of $1.43. The bottom line surged 38% year over year.

Total revenues were $11 billion, indicating a year-over-year increase of 21%. Total orders grew 27% on a year-over-year basis to $14.2 billion.

 

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This article originally published on Zacks Investment Research (zacks.com).

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