L3Harris Technologies Inc
Q1 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +8.13%.
Did LHX Beat Earnings? Q1 2025 Results
L3Harris Technologies posted a mixed first quarter for 2025, delivering an earnings beat alongside a modest revenue shortfall that reflected deliberate portfolio reshaping rather than demand weakness. Non-GAAP diluted EPS of $2.41 cleared the consensus estimate of $2.32 by 4.00%, while total revenue of $5.13 billion came in 1.76% below expectations and slipped 1.5% year-over-year, with divestitures of its antenna and Aerojet Ordnance Tennessee businesses accounting for virtually all of the top-line pressure. On an organic basis, revenue was flat, anchored by a 4% gain in Communication Systems on strong international tactical demand and 9% organic growth in Aerojet Rocketdyne on rising missile and munitions volumes. Adjusted segment margins expanded 50 basis points to 15.6%, aided by LHX NeXt cost savings and a favorable high-margin international mix. L3Harris also <a href="https://247wallst.com/investing/2025/03/24/jpmorgan-loves-these-5-blue-chip-stocks-that-all-recently-raised-their-dividends/">raised its dividend for the 24th consecutive year</a> while returning nearly $800 million to shareholders. Full-year 2025 EPS guidance was revised to $10.30-$10.50, reflecting CAS divestiture dilution, with free cash flow guidance reaffirmed at $2.40 billion-$2.50 billion.
- Favorable high-margin international mix in Tactical Communications
- LHX NeXt driven cost savings across all segments
- Improved program performance in Integrated Mission Systems
- Increased production volume across key missile and munitions programs in Aerojet Rocketdyne
- Organic revenue growth of 4% in CS and 9% in AR
- Lower unallocated corporate expenses including reduced LHX NeXt implementation costs
- Lower interest expense from decreased short-term debt balances
“We're building on our momentum with a strong start to the year, driven by solid operational execution and program performance, leading to continued expansion in adjusted segment operating margin. We continue to see demand for our solutions, reflecting our alignment with key national security priorities. Our capital deployment strategy remains clear, returning nearly $800 million in the quarter to shareholders through dividends and share repurchases, and increasing our dividend for the 24th consecutive year. As we work toward our 2026 financial framework, we remain confident in our ability to meet our targets and drive long-term, profitable growth.”
L3Harris Technologies CEO, on the earnings call
Forward Guidance & Outlook
L3Harris updated full-year 2025 guidance to reflect the Commercial Aviation Solutions divestiture and FOS business realignment. Total company revenue is now expected at $21.4B–$21.7B (prior: $21.8B–$22.2B). Non-GAAP diluted EPS guidance was revised to $10.30–$10.50 (prior: $10.55–$10.85), reflecting ~$0.55 CAS divestiture dilution partially offset by ~$0.25 from improved performance and capital deployment, representing ~7% growth at midpoint. Adjusted free cash flow guidance was reaffirmed at $2.4B–$2.5B. Adjusted segment operating margin is expected at mid-to-high 15%. Net interest expense guidance improved to ~$600M from ~$630M. CS revenue expected at $5.6B–$5.7B with ~25% margin; IMS ~$6.3B with high-11% margin; SAS $6.9B–$7.1B with low-12% margin; AR ~$2.8B with mid-12% margin. The company expressed confidence in meeting its 2026 financial framework targets.
LHX YoY Financials
LHX Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.