MELBOURNE, Fla. - L3Harris Technologies (NYSE:LHX) celebrated the first anniversary of its acquisition of Aerojet Rocketdyne, a prominent power and propulsion systems provider, by announcing substantial performance improvements and increased investment in the subsidiary. The company has increased its internal investments in Aerojet Rocketdyne by 40% compared to the previous year, aiming to enhance production capabilities across its product lines.
This strategic move included expanding and modernizing manufacturing facilities and providing over $25 million in funding to sub-tier suppliers. Additionally, L3Harris has qualified additional suppliers to strengthen the supply chain for solid rocket motor components.
According to Christopher E. Kubasik, Chair and CEO of L3Harris, the investment in Aerojet Rocketdyne is vital for supporting the defense industrial base in the United States. Ross Niebergall, President of Aerojet Rocketdyne at L3Harris, stated that the company has significantly increased propulsion production and improved on-time delivery rates.
L3Harris reported that since the acquisition, they have achieved record-setting delivery months for five programs and cut late deliveries by nearly half. The company's propulsion systems have been instrumental in key missile defense tests and supported significant launches such as Vulcan, Starliner, and the final Delta IV Heavy rocket. They have also been selected to support hypersonic and critical defense programs like the Next Generation Interceptor.
Moreover, L3Harris has successfully completed hot-fire tests of advanced solid rocket motors, including Zeus 2, met key delivery milestones, and finished RS-25 rocket engine certification testing for NASA's Artemis campaign.
L3Harris Technologies positions itself as the "Trusted Disruptor" in the defense industry, focusing on delivering technology solutions that span various domains, including space, air, land, sea, and cyber, all in the service of national security.
L3Harris Technologies has reported strong financial results for the second quarter of 2024, including a 9% increase in non-GAAP earnings per share, reaching $3.24. The company's segment operating margin hit 15.6%, with a significant backlog of $32 billion and over $5 billion in new contracts awarded during the quarter.
These recent developments have led to an increase in full-year guidance for revenue, margin rate, and EPS, with an EPS range of $12.85 to $13.15. Free cash flow guidance remains steady at $2.2 billion.
The company has been focusing on strategic initiatives and operational improvements to meet customer expectations and create shareholder value. This includes investments in new technologies, such as Smart cell for radio integration and software for software-defined radios. L3Harris is confident in its undersea and autonomy market growth, with a $1 billion opportunity in the maritime sector.
InvestingPro Insights
As L3Harris Technologies (NYSE:LHX) marks a year of growth following its acquisition of Aerojet Rocketdyne, the company's financial metrics and market performance reflect a strategic trajectory that resonates with its status as a "Trusted Disruptor" in the defense industry. With a market capitalization of $42.72 billion and a revenue growth of 15.44% over the last twelve months as of Q2 2024, L3Harris is not only expanding its operational capabilities but also showcasing a robust financial outlook.
L3Harris's commitment to enhancing its product lines and supply chain is underpinned by a solid financial base, as evidenced by a gross profit of $5.468 billion and an operating income margin of 11.47% during the same period. These figures demonstrate the company's efficiency in translating revenue into profitability. The company's strategic investments in its subsidiary are further supported by a positive outlook from analysts, with five analysts having revised their earnings upwards for the upcoming period, signaling confidence in L3Harris's future performance.
InvestingPro Tips highlight the company's long-standing reliability in shareholder returns, noting that L3Harris has raised its dividend for 22 consecutive years. Additionally, the company is trading at a low P/E ratio relative to near-term earnings growth, suggesting an attractive valuation for investors considering the company's growth prospects. For investors seeking more insights, there are 11 additional InvestingPro Tips available, which can be accessed through the InvestingPro platform at https://www.investing.com/pro/LHX. To gain deeper investment insights, readers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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