MELBOURNE, Fla. - L3Harris Technologies (NYSE: NYSE:LHX), a defense contractor, announced it has been awarded an indefinite delivery, indefinite quantity contract by the U.S. Navy, potentially worth $999 million. The contract spans over the next five years, during which the company will supply advanced communication technology to U.S. and coalition forces.
Under the contract, L3Harris will provide its Multifunctional Information Distribution System Joint Tactical Radio System Terminals (MIDS JTRS). This software-defined Link 16 radio technology is designed to support communication for air, ground, and maritime platforms in a variety of operational environments.
Christopher E. Kubasik, Chair and CEO of L3Harris, emphasized the importance of coalition forces being able to collaborate in real-time to address threats near ally and partner borders. He stated that their resilient technology is crucial for maintaining situational awareness and informing a common operating picture to ensure mission success.
Link 16 is recognized as a multi-domain network that facilitates assured communications and provides situational awareness, command and control, and targeting information. L3Harris completed its acquisition of the Link 16 Tactical Data Links product line in January 2023 and has been actively expanding its range of communication devices and systems to enable access to Link 16 across various platforms, with initiatives to extend its capabilities to space assets.
The award continues L3Harris's long-standing relationship with the U.S. armed services and allied nations, building on 24 years of delivering standardized communication interoperability solutions.
L3Harris Technologies positions itself as a "Trusted Disruptor" in the defense industry, focusing on connecting space, air, land, sea, and cyber domains to serve national security interests.
The company has cautioned that forward-looking statements regarding contract values and system capabilities involve risks and uncertainties that could cause actual results to differ materially from anticipated outcomes.
This news is based on a press release statement from L3Harris Technologies.
In other recent news, L3Harris Technologies successfully completed the Safety of Flight qualifications for its Viper Shield electronic warfare suite, designed for F-16 fighter jets. The company will provide this advanced capability to the F-16 fleets of six international partners. Meanwhile, L3Harris' Aerojet Rocketdyne segment has seen a significant increase in rocket motor output due to key investments, leading to a revenue increase for the unit, reporting $598 million in the third quarter.
In relation to analyst notes, BofA Securities upgraded L3Harris' stock from Neutral to Buy, reflecting confidence in the company's streamlined growth strategy. Jefferies maintained a Buy rating on L3Harris, highlighting a 5% organic growth acceleration in the third quarter. Truist Securities also increased the price target for L3Harris, maintaining a Buy rating following strong third-quarter results.
These recent developments underline the company's potential for sustained growth and profitability, supported by projections of substantial free cash flow growth and increased defense margins. However, it's worth noting that L3Harris remains focused on enhancing operational efficiency and meeting mission-critical needs in a complex global threat environment.
InvestingPro Insights
L3Harris Technologies' recent $999 million contract with the U.S. Navy aligns well with its strong market position and financial performance. According to InvestingPro data, the company boasts a substantial market capitalization of $46.48 billion, reflecting its significant presence in the defense sector.
An InvestingPro Tip highlights that L3Harris is a prominent player in the Aerospace & Defense industry, which is evident from this major contract award. This position is further solidified by the company's impressive revenue of $21.14 billion over the last twelve months, with a notable revenue growth of 13.32% during the same period.
Another relevant InvestingPro Tip reveals that L3Harris has maintained dividend payments for 54 consecutive years, demonstrating financial stability and commitment to shareholder returns. This long-standing dividend history could be attractive to investors looking for consistent income alongside potential growth from government contracts like the one announced.
The company's profitability is also noteworthy, with a gross profit of $5.58 billion and an operating income of $2.39 billion over the last twelve months. These figures suggest that L3Harris has the financial strength to execute large-scale contracts effectively.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. In fact, there are 10 more InvestingPro Tips available for L3Harris Technologies, providing a deeper understanding of the company's financial health and market position.
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