L3Harris Sees A Gloomy FY25 Despite 3% Revenue Growth In Q4

L3Harris Technologies Inc LHX reported fourth-quarter FY24 sales growth of 3% year-on-year to $5.523 billion, beating the analyst consensus estimate of $5.502 billion.

The defense contractor reported adjusted earnings of $3.47 per share, beating analyst estimates of $3.42 per share.

The results reflect growth in the business and continued operational efficiencies driving margin improvement.

Segment Revenues: Space & Airborne Systems (SAS) declined 4% to $1.72 billion, Integrated Mission Systems (IMS) rose 9% to $1.77 billion, Communication Systems (CS) increased 5% to $1.4 billion and that of Aerojet Rocketdyne (AR) climbed 5% to $628 million.

Operating income for the quarter was $569 million compared to $154 million last year. The operating margin was 15.3%.

L3Harris generated $2.6 billion in operating cash flow and $2.3 billion in adjusted free cash flow during the year. 

The company held $615 million in cash and equivalents as of January 3, 2025.

"Through our LHX NeXt initiative, we exceeded our cost-savings target for 2024, achieving $800 million, and are raising our overall cost-savings goal to $1.2 billion by the end of 2025, a year ahead of schedule," said Christopher Kubasik, chair and CEO of L3Harris.

"As we move into 2025, our momentum remains strong, driven by strong bookings, a robust pipeline, expanding international opportunities, and continued transformation and operational improvements."

Outlook: L3Harris sees FY25 revenue of $21.8 billion – $22.2 billion, with an estimate of $21.86 billion. 

The company expects FY25 adjusted EPS of $10.55 – $10.85 per share against an estimate of $14.17.

Price Action: LHX shares are trading lower by 0.38% at $211.15 at the last check Thursday.