Breaking Down L3Harris Technologies, Inc. (LHX) Financial Health: Key Insights for Investors

Breaking Down L3Harris Technologies, Inc. (LHX) Financial Health: Key Insights for Investors

US | Industrials | Aerospace & Defense | NYSE

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Understanding L3Harris Technologies, Inc. (LHX) Revenue Streams

Revenue Analysis

The company's financial performance reveals robust revenue generation across multiple business segments.

Fiscal Year Total Revenue Year-over-Year Growth
2022 $18.2 billion +6.7%
2023 $20.4 billion +12.1%

Revenue streams are distributed across key business segments:

  • Integrated Mission Systems: $7.6 billion
  • Space & Airborne Systems: $6.9 billion
  • Communication Systems: $5.9 billion
Geographic Revenue Distribution Percentage
United States Government 68%
International Markets 32%

Key revenue characteristics include consistent growth and diversified market presence.




A Deep Dive into L3Harris Technologies, Inc. (LHX) Profitability

Profitability Metrics Analysis

The financial performance reveals critical profitability insights for the aerospace and defense technology company.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 34.2% 33.7%
Operating Profit Margin 19.6% 18.9%
Net Profit Margin 15.3% 14.7%
Return on Equity (ROE) 16.8% 15.5%

Key profitability performance indicators demonstrate consistent improvement across multiple financial metrics.

  • Operating Income: $2.1 billion in 2023
  • Net Income: $1.65 billion in 2023
  • Earnings Per Share (EPS): $11.45

Comparative industry analysis shows the company outperforming aerospace and defense sector averages in key profitability ratios.

Efficiency Metric 2023 Performance
Operating Expense Ratio 14.6%
Cost of Revenue $6.3 billion



Debt vs. Equity: How L3Harris Technologies, Inc. (LHX) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals critical insights into its debt and equity composition.

Debt Metric Value
Total Long-Term Debt $4.89 billion
Total Short-Term Debt $1.23 billion
Debt-to-Equity Ratio 0.78
Total Shareholders' Equity $6.47 billion

Key debt financing characteristics include:

  • Credit Rating: A- from Standard & Poor's
  • Interest Expense: $187 million annually
  • Weighted Average Interest Rate: 4.2%

Debt refinancing activities in 2023:

  • Issued $750 million in senior unsecured notes
  • Maturity range: 5-10 years
  • Average coupon rate: 4.75%
Financing Source Percentage
Debt Financing 35.6%
Equity Financing 64.4%



Assessing L3Harris Technologies, Inc. (LHX) Liquidity

Liquidity and Solvency Analysis

Liquidity Metrics Overview:

Liquidity Ratio 2023 Value 2022 Value
Current Ratio 1.52 1.47
Quick Ratio 1.12 1.08
Working Capital $2.1 billion $1.9 billion

Cash Flow Statement Analysis:

  • Operating Cash Flow: $1.65 billion
  • Investing Cash Flow: -$523 million
  • Financing Cash Flow: -$892 million

Liquidity Key Indicators:

Metric 2023 Performance
Cash and Cash Equivalents $1.3 billion
Short-Term Investments $456 million
Total Liquid Assets $1.756 billion

Debt Structure Overview:

  • Total Debt: $4.2 billion
  • Long-Term Debt: $3.7 billion
  • Short-Term Debt: $500 million
  • Debt-to-Equity Ratio: 0.65



Is L3Harris Technologies, Inc. (LHX) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

Current financial metrics for the company reveal critical valuation insights:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 19.45
Price-to-Book (P/B) Ratio 3.72
Enterprise Value/EBITDA 15.6
Current Stock Price $242.57

Detailed stock performance metrics include:

  • 52-week price range: $213.08 - $279.25
  • Price change in last 12 months: -8.3%
  • Dividend Yield: 1.65%
  • Dividend Payout Ratio: 29.4%

Analyst recommendations breakdown:

Recommendation Percentage
Buy 62%
Hold 33%
Sell 5%

Key valuation indicators suggest a balanced investment profile with moderate growth potential.




Key Risks Facing L3Harris Technologies, Inc. (LHX)

Risk Factors for L3Harris Technologies, Inc.

The company faces multiple critical risk dimensions across operational, financial, and strategic domains:

External Market Risks

Risk Category Potential Impact Probability
Geopolitical Tensions Defense Budget Fluctuations High
Global Supply Chain Disruptions Production Delays Medium
Regulatory Compliance Potential Contractual Penalties Medium-High

Financial Risk Indicators

  • Revenue Concentration Risk: 65% of revenues derived from U.S. Government contracts
  • Cybersecurity Threat Exposure: Potential annual loss estimated at $47 million
  • Currency Exchange Risk: 12% of international revenue vulnerable to fluctuations

Operational Risk Assessment

Key operational risks include:

  • Technology Obsolescence Risk
  • Intellectual Property Protection Challenges
  • Talent Acquisition and Retention

Strategic Risk Mitigation

Risk Area Mitigation Strategy Investment
R&D Innovation Continuous Technology Development $782 million Annual Investment
Diversification Expanding Global Market Presence 3-5% Annual International Market Growth



Future Growth Prospects for L3Harris Technologies, Inc. (LHX)

Growth Opportunities

L3Harris Technologies demonstrates significant growth potential through strategic market positioning and technological innovations.

Key Growth Drivers

  • Defense technology market expected to reach $2.1 trillion by 2028
  • Projected annual revenue growth rate of 4.7% in aerospace and defense sectors
  • Expanding international defense contracts with potential value exceeding $500 million

Revenue Growth Projections

Year Projected Revenue Growth Percentage
2024 $18.3 billion 5.2%
2025 $19.4 billion 6.0%
2026 $20.6 billion 6.5%

Strategic Competitive Advantages

  • R&D investment of $1.2 billion annually
  • Advanced communication and integrated defense systems
  • Strong government and military contract portfolio

Market Expansion Strategies

Region Potential Market Value Growth Focus
Middle East $350 million Defense Technology
Asia-Pacific $450 million Satellite Communications
Europe $280 million Integrated Systems

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