L3Harris Technologies delivers mixed Q4 2021 results

L3Harris Technologies Inc. (NYSE: LHX) has reported its Q4 and fiscal 2021 results and issued fiscal 2022 financial guidance.

In the fourth quarter, the company reported revenue of $4.4 billion, a 7% drop compared to Q4 2020 and down 1% on an organic basis. For the full year, the company reported revenue of $17.8 billion, a 2% drop from a year ago but a 2% increase on an organic basis. Revenues dropped because of divestitures in the Aviation Systems and supply chain-related issues within the Communication Systems segment.

Q4 2021 earnings top estimates

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The company reported a Q4 net income margin of 11.1% and GAAP earnings per share of $2.46. Non-GAAP adjusted earnings margin was 19.2%, and non-GAAP EPS was $3.3, beating consensus estimates of $2.86. The increase in non-GAAP EPS was driven by integration benefits, e2 performance, low share count, and expenses management but this was offset partially offset by divesture and supply chain-related impacts. 

For a full year, the company had a GAAP net income margin of 10.35 and GAAP EPS of $9.09, while GAAP adjusted earnings before interest and taxes margin was 19.1% while non-GAAP EPS was $12.95 representing a 125 increase. The increase was driven by integration benefits, e3 performance, and lower share count, which offset high R&D investments, supply chain, and divesture related impacts.

Vice-Chair and Chief Executive Officer Christopher E. Kubasik commented:

The L3Harris team delivered solid EPS growth, consistent with expectations, despite supply chain headwinds and budget uncertainty. In 2022, we look forward to taking the next step as the industry’s trusted disruptor to deliver innovative and affordable solutions, and with a focus on creating value over the long term.

L3Harris expects revenue of $17.3 billion to $17.7 billion

L3Harris also finalized the divestitures of the Narda-MITEQ and ESSCO operations, generating $130 million in total revenues in the quarter, contributing to $2.8 billion in total proceeds following the post-merger portfolio structuring.

For fiscal 2022 the company has issued guidance with a revenue range of $17.3 billion to $17.7 billion with organic growth of between 1% and 3%. As a result, the company expects fiscal 2022 GAAP earnings per share to range from $10.75 to $11.05 with non-GAAP earnings per share of $13.35 to $2.25 billion.