L3Harris Technologies Stock Slips After Q4 Results, Provides FY22 Outlook

L3Harris Technologies Inc LHX reported a fourth-quarter FY21 revenue decline of 7% year-over-year to $4.35 billion and decreased 1% on an organic basis.
The revenue decline was attributable to divestitures within Aviation Systems and supply chain-related constraints within Communication Systems.
Integrated Mission Systems revenue was $1.56 billion (+6% Y/Y) and an operating margin of 16.6%, an improvement of 230 bps.
Space and Airborne Systems revenue was $1.28 billion (+2% Y/Y), an operating margin of 18.3%, down 120 bps.
Communication Systems revenue was $1.02 billion (-11% Y/Y), and operating margin 24.9%, down 100 bps.
Aviation Systems revenue $535 million was (-37% Y/Y), and adjusted operating margin of 14.4%, down 50 bps.
Adjusted EPS improved to $3.30 compared to $3.14 in 4Q20, beating the consensus of $2.87.
Adjusted EBIT was $836 million (-3% Y/Y), and the margin expanded by 70 bps to 19.2%.
L3Harris Technologies generated $2.69 billion in operating cash flow for FY21 and $2.7 billion in adjusted free cash flow.
The company returned $4.5 billion to shareholders in share repurchases and dividends in 2021.
FY22 Guidance: L3Harris expects revenue of $17.3 billion - $17.7 billion and up 1% - 3% on an organic basis. The company expects GAAP EPS of $10.75 - $11.05 and Adjusted EPS of $13.35 - $13.65.
It expects Segment operating margin of 16.00% - 16.25%; L3Harris adjusted EBIT margin of 19.00% - 19.25%.
The company expects operating cash flow of $2.4 billion - $2.5 billion, with Adjusted free cash flow of $2.15 billion - $2.25 billion, with estimated Share repurchases of ~$1.5 billion.
Price Action: LHX shares traded lower by 3.85% at $210.26 on the last check Monday.

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