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L3Harris Technologies, Inc. LHX reported first-quarter 2025 adjusted earnings (from continuing operations) of $3.47 per share, which beat the Zacks Consensus Estimate of $2.32 by 3.9%. The bottom line also increased 7.1% from the year-ago quarter’s $2.25. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Excluding one-time items, the company reported GAAP earnings of $2.04 per share, up from $1.48 in the prior-year period.
The year-over-year improvement in the bottom line can be attributed to higher operating income.
L3Harris’ revenues totaled $5.13 billion, which missed the Zacks Consensus Estimate of $5.23 billion by 1.9%. The top line also dropped 1.5% from the year-ago quarter’s $5.21 billion.
The year-over-year decrease was due to the divestiture of LHX’s antenna business from Space & Airborne Systems ("SAS") in the second quarter of 2024.
L3Harris Technologies Inc price-consensus-eps-surprise-chart | L3Harris Technologies Inc Quote
Integrated Mission Systems: The segment recorded net revenues of $1.59 billion, indicating a 2% year-over-year decline. This was due to lower aircraft missionization volume, a planned ISR mission operations program ramp-down and lower material volume on maritime programs.
This segment recorded an operating income of $203 million compared with $185 million in the first quarter of 2024. The segment’s operating margin expanded 140 basis points (bps) to 12.8%, caused by improved program performance, a favorable mix associated with higher margin airborne electro-optical sensors volume and LHX NeXt-driven cost savings.
Space and Airborne Systems: Net revenues from the segment were $1.61 billion, indicating a year-over-year decline of 8%. The year-over-year deterioration was due to the adverse impact of the divestiture of the antenna business in the second quarter of 2024.
The segment’s operating income declined to $176 million from $216 million in the year-ago quarter. The segment’s operating margin contracted 140 bps to 10.9% owing to continuing challenges on classified development programs in Space Systems.
Communication Systems: Net revenues from this segment increased 4% to $1.35 billion. This improvement was driven by increased international volume on resilient communication equipment and the sale of satellite communications terminal inventory.
The unit’s operating income improved to $345 million from $310 million in the year-ago quarter. The segment’s operating margin expanded 150 bps to 25.5%, caused by a favorable high-margin international mix in Tactical Communications and LHX NeXt-driven cost savings.
Aerojet Rocketdyne: This segment reported revenues of $629 million, which improved 8% year over year. This rise was driven by increased production volume across key missile and munitions programs and a new program ramp.
The unit’s operating income of $76 million dropped from $77 million in the first quarter of 2024. The operating margin contracted 110 bps to 12.1% due to lower net favorable EAC adjustments.
As of March 28, 2025, L3Harris had $517 million in cash and cash equivalents compared with $615 million as of Jan. 3, 2025.
The long-term debt as of the same date was $10.98 billion compared with $11.08 billion as of Jan 3, 2025.
The net cash outflow from operating activities amounted to $42 million during the first quarter of 2025 compared with $104 billion in the prior-year period.
At the end of the first quarter of 2025, L3Harris’ adjusted free cash flow was $72 million compared with $156 million at the end of the first quarter of 2024.
L3Harris partially updated its financial guidance for 2025.
It now expects to generate revenues in the range of $21.40-$21.70 billion, lower than its prior guidance of $21.80-$22.20 billion. The Zacks Consensus Estimate for 2025 revenues is pegged at $21.85 billion, which lies higher than the company’s newly guided range.
L3Harris expects its adjusted earnings to be in the range of $10.30-$10.50 (taking CAS divestiture and improved performance & capital deployment actions into consideration). The consensus estimate for adjusted earnings is pegged at $10.57 per share, which lies above the company’s guided range.
LHX still expects its adjusted segment operating margin to be in the mid-to-high 15% range. It also continues to expect adjusted free cash flow between $2.40 billion and $2.50 billion.
L3Harris currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RTX Corporation’s RTX first-quarter 2025 adjusted earnings per share (EPS) of $1.47 beat the Zacks Consensus Estimate of $1.35 by 8.9%. The bottom line also improved 9.7% from the year-ago quarter’s level of $1.34, driven by growth in adjusted segment operating profit.
Its first-quarter sales totaled $20.31 billion, which surpassed the Zacks Consensus Estimate of $19.71 billion by 3%. The top line also surged a solid 5.2% from $19.31 billion recorded for the first quarter of 2024.
Lockheed Martin Corporation LMT reported first-quarter 2025 earnings of $7.28 per share, which beat the Zacks Consensus Estimate of $6.34 by 14.8%. The bottom line increased 15% from the year-ago quarter's reported figure of $6.33.
Net sales were $17.96 billion, which beat the Zacks Consensus Estimate of $17.76 billion by 1.1%. The top line also increased 4.5% from $17.20 billion reported in the year-ago quarter.
Northrop Grumman Corporation NOC reported first-quarter 2025 adjusted earnings of $6.06 per share, which missed the Zacks Consensus Estimate of $6.21 by 2.4%.
NOC’s total sales of $9.47 billion missed the Zacks Consensus Estimate of $9.91 billion by 4.4%. The top line also declined 6.6% from $10.13 billion reported in the year-ago quarter.
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This article originally published on Zacks Investment Research (zacks.com).
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