Will Segment Sales Benefit L3Harris Technologies in Q3 Earnings?

L3Harris Technologies, Inc. (LHX - Free Report) is set to announce its results for the third quarter of 2024 on October 24, following the market closure.

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L3Harris has consistently surpassed earnings expectations, evidenced by a four-quarter average earnings surprise of 3.31%. The expected strong revenue performance across its various business segments indicates a potential increase in earnings, despite the challenges posed by rising interest expenses.

LHX’s Integrated Mission Systems (IMS) Unit: A Challenging Outlook

The Integrated Mission Systems (IMS) segment is anticipated to experience a boost from increased sales volume in the maritime sector. However, a decline in sales from the commercial aviation segment may partially offset these gains.

The Zacks Consensus Estimate for IMS revenues in the third quarter stands at approximately $1,632.4 million, reflecting a 4.1% increase compared to the previous year's results.

Positive Growth in Other Units

Increased sales from Space Systems and enhancements in Intel & Cyber initiatives are expected to positively impact the revenues of the Space and Airborne Systems (SAS) unit.

The Zacks Consensus Estimate for the SAS segment's revenue is currently around $1,739.5 million, suggesting a 3.2% rise from the year-ago figures.

The Communication Systems unit is likely to see strong performance driven by higher sales in the Tactical Communication and Broadband Communications sectors.

The revenue estimate for this unit is about $1,353.3 million, which indicates a solid 7.8% growth from last year's report.

Q3 Revenue and Earnings Outlook for LHX

With all major segments projected to demonstrate robust revenue growth, L3Harris is expected to achieve significant top-line growth in its upcoming quarterly results. Additionally, positive synergies from the Aerojet Rocketdyne acquisition may further enhance LHX's performance in the third quarter.

The Zacks Consensus Estimate for total sales in Q3 is approximately $5.30 billion, representing an increase of 7.9% from the previous year.

The strong sales growth is anticipated to positively influence LHX's bottom line as well. Improved operating margins due to operational efficiency, successful program execution, and cost-reduction strategies are likely to support earnings growth. However, heightened interest expenses may negatively affect overall earnings growth.

The consensus estimate for third-quarter earnings per share is $3.26, indicating a 2.2% increase from the prior year's results.

Examining the Zacks Model for LHX

The current model indicates a strong potential for L3Harris Technologies to exceed earnings expectations this time around. A combination of a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) raises the likelihood of an earnings beat, which is present in L3Harris's case.

LHX’s Earnings ESP: L3Harris has an Earnings ESP of +1.19%, highlighting promising prospects for favorable earnings reports.

LHX’s Zacks Rank: Currently, LHX holds a Zacks Rank of #3.

Consider Other Sector Players

Additionally, companies in the same sector that may also beat earnings expectations include:

Lockheed Martin (LMT - Free Report), which is scheduled to report third-quarter earnings on October 22 before the market opens. It has an Earnings ESP of +1.29% and currently holds a Zacks Rank of 3.

The Zacks Consensus Estimate for LMT’s third-quarter earnings is $6.47 per share, with sales estimated at $17.28 billion, showing a 2.4% increase from the prior year's figures.

Northrop Grumman (NOC - Free Report), expected to announce its third-quarter results on October 24 before the market opens, has an Earnings ESP of +1.12% and holds a Zacks Rank of 2.

For NOC, the consensus estimate for third-quarter earnings is $6.06 per share, with sales projected at $10.23 billion, reflecting a 4.7% increase compared to the same quarter last year.

Curtiss-Wright Corp. (CW - Free Report) is set to report third-quarter results on October 30 after the market closes, with an Earnings ESP of +0.54% and a strong Zacks Rank of 1.

The consensus estimate for CW’s third-quarter earnings is $2.70 per share, an increase of 6.3% from last year, with sales expected to reach $757 million—showing a 4.5% rise from the previous year's results.

Earnings, Revenue, Growth