Will Segment Sales Benefit L3Harris Technologies in Q3 Earnings?

L3Harris Technologies, Inc. (LHX) is preparing to announce its third-quarter 2024 results on October 24, after the market closes.

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L3Harris has delivered an average earnings surprise of 3.31% over the last four quarters. The company is expected to report strong earnings, driven by significant sales volume growth across its business segments despite the pressures from high interest expenses.

Mixed Results for the Integrated Mission Systems Unit

The Integrated Mission Systems (IMS) segment is likely to see a boost in revenue from increased sales in the maritime sector. However, this may be counterbalanced by decreased sales in the commercial aviation area, which could hinder IMS's overall performance.

The current Zacks Consensus Estimate suggests that IMS revenues for the third quarter are anticipated to reach approximately $1,632.4 million, marking a 4.1% increase from the same period last year.

Positive Contributions from Other Units

Other segments, such as Space and Airborne Systems (SAS), are expected to benefit from strong sales in Space Systems and intelligence and cyber programs. The Zacks Consensus Estimate for SAS revenues stands at about $1,739.5 million, signifying a 3.2% increase from the previous year.

Moreover, the Communication Systems unit is projected to perform well due to increased sales from Tactical Communications and Broadband Communications. This unit's revenue estimate is around $1,353.3 million, indicating a growth of 7.8% compared to the prior year's results.

Third Quarter Projections for L3Harris

Given the promising growth opportunity across its major segments, L3Harris is likely to report strong top-line figures for Q3. Additionally, positive synergies from the Aerojet Rocketdyne acquisition may further enhance L3Harris’s financial performance during this quarter.

The consensus estimate for third-quarter sales is projected at $5.30 billion, representing a growth of 7.9% year over year. The expected sales growth is anticipated to positively influence the company's bottom line, supported by improved operational margins stemming from enhanced program performance and cost management strategies.

However, the impact of higher interest expenses may slightly curb overall earnings growth. The consensus estimate for third-quarter earnings is set at $3.26 per share, reflecting a modest increase of 2.2% from the same quarter last year.

Analysis of L3Harris Earnings Predictions

Based on our analysis, L3Harris Technologies is likely to exceed earnings expectations in this quarter. A combination of a positive Earnings Surprise Prediction (ESP) and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) bolsters the likelihood of an earnings surprise, an outlook supported by current figures.

Earnings ESP for LHX: L3Harris has an Earnings ESP of +1.19%. This metric can help identify potential stocks to watch before earnings are disclosed.

Zacks Rank for LHX: Currently, L3Harris holds a Zacks Rank of 3.

Other Stocks worth Watching

In addition to L3Harris, several companies in the same sector also exhibit promising characteristics for potential earnings beats in their upcoming reports.

Lockheed Martin (LMT) is scheduled to report third-quarter earnings on October 22, before market opening. It holds an Earnings ESP of +1.29% and a Zacks Rank of 3. The consensus estimate for LMT’s earnings this quarter is $6.47 per share, with expected sales of $17.28 billion reflecting a 2.4% increase from the previous year.

Northrop Grumman (NOC) plans to announce its third-quarter results on October 24, before market opening, with an Earnings ESP of +1.12% and a Zacks Rank of 2. The consensus estimate for NOC’s earnings is $6.06 per share, with anticipated sales of $10.23 billion, indicating a 4.7% increase compared to a year ago.

Curtiss-Wright Corp. (CW) also prepares to reveal its third-quarter earnings on October 30, after market close. It has an Earnings ESP of +0.54% and currently holds a Zacks Rank of 1. The estimate for third-quarter earnings is $2.70 per share, marking a 6.3% improvement from last year's figures, with sales projected at $757 million, a 4.5% increase from the previous year.

Earnings, Sales, Growth