L3Harris Technologies (NYSE: LHX) reported Q2 EPS of $2.83, $0.22 better than the analyst estimate of $2.61. Revenue for the quarter came in at $4.4 billion versus the consensus estimate of $4.46 billion.

• 2Q20 revenue
  • $4.4 billion, up 138% and flat versus prior-year GAAP and pro forma1, respectively
  • Up 2.3% on an organic2 basis; funded book-to-bill of 1.09
• 2Q20 margin and earnings
  • Net income margin of 6.3%; adjusted earnings before interest and taxes (EBIT)3 margin of 18.2%
  • GAAP earnings per share from continuing operations (EPS) of $1.30, down 41% and 29% versus prior-year GAAP and pro forma, respectively
  • Non-GAAP3 EPS of $2.83, up 13% versus prior-year adjusted pro forma
• 2Q20 cash flow
  • Operating cash flow of $802 million; adjusted free cash flow (FCF)4 of $785 million

“Our top priority continues to be the safety of our workforce, and I am proud of their dedication as well as the progress we have made delivering on customer and shareholder commitments during the pandemic. We’re now at the 1-year mark post-merger and our performance highlights the benefits of the combination,” said William M. Brown, Chairman and Chief Executive Officer. “Our traction with the integration and execution against strategic priorities give us confidence in our current-year outlook and position us well over the medium term."

GUIDANCE:

L3Harris Technologies sees FY2020 EPS of $11.15-$11.55, versus the consensus of $11.32. L3Harris Technologies sees FY2020 revenue of $18.2-18.6 billion, versus the consensus of $18.51 billion.

L3Harris updates 2020 guidance as follows:

• Revenue
  • $18.2 - $18.6 billion, up organically11 3% - 5% on an adjusted pro forma basis12 (unchanged from previous guidance)
• Margin and earnings
  • GAAP net income margin of 7.1%+ (decreased from previous guidance of ~8.4%)
  • Adjusted EBIT13 margin of 17.5%+ (increased from previous guidance of ~17.5%)
  • GAAP EPS of $6.03 - $6.43 (decreased from previous guidance of $6.95 - $7.35)
  • Non-GAAP EPS13 of $11.15 - $11.55 (unchanged from previous guidance)
• Cash flow and capital deployment
  • Operating cash flow and adjusted free cash flow10 at $2.8 - $2.9 billion and $2.6 - $2.7 billion, respectively (unchanged from previous guidance)
  • ~$1.7 billion in share repurchases, inclusive of proceeds from divestitures announced year-to-date (unchanged from previous guidance)

For earnings history and earnings-related data on L3Harris Technologies (LHX) click here.