Will Segment Sales Benefit L3Harris Technologies in Q3 Earnings?

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

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L3Harris has demonstrated a strong history with a four-quarter average earnings surprise of 3.31%. The company is likely to see robust earnings due to solid revenue growth across all of its business segments, even while faced with higher interest expenses.

Integrated Mission Systems (IMS) Unit: A Mixed Performance

The Integrated Mission Systems (“IMS”) segment is expected to benefit from increased sales in the maritime sector. However, a downturn in sales from the commercial aviation division might have somewhat offset the IMS segment's overall performance.

The Zacks Consensus Estimate for IMS’ revenue in the third quarter is projected at $1,632.4 million, reflecting an increase of 4.1% compared to the revenue recorded in the same quarter last year.

Other Units Poised to Enhance Revenue

Strong sales growth is anticipated from the Space Systems division and the Intel & Cyber programs, giving a further boost to the revenues of the Space and Airborne Systems (“SAS”) unit.

The Zacks Consensus Estimate for the SAS segment’s revenues stands at $1,739.5 million, indicating a 3.2% rise over the revenue reported in the same quarter the previous year.

The Communication Systems unit is also expected to show strong performance due to higher sales in both the Tactical Communications and Broadband Communications sectors.

The revenue estimate for this unit is $1,353.3 million, suggesting a significant growth of 7.8% from the previous year’s reported figures.

Q3 Revenue Estimates for L3Harris

With major segments demonstrating strong revenue growth expectations, L3Harris is anticipated to report a notable boost in its overall sales for the quarter. Additionally, positive synergies stemming from the acquisition of Aerojet Rocketdyne are likely to further enhance the third-quarter results.

The overall revenue consensus estimate for L3Harris is pegged at $5.30 billion, which implies a solid growth of 7.9% compared to the figures from the prior year.

These strong sales projections should also favor L3Harris's bottom-line earnings. Improvements in operating margins, driven by operational enhancements, favorable project performance, and effective cost-reduction strategies, are expected to boost its earnings.

However, increased interest expenses may have some negative implications for overall earnings growth.

The consensus estimate for third-quarter earnings of L3Harris is set at $3.26 per share, indicating a 2.2% increase from earnings in the same quarter last year.

Insights from the Zacks Model for L3Harris

The Zacks model indicates a potential earnings beat for L3Harris Technologies this quarter. When a stock has a positive Earnings ESP along with a Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold), the chances for an earnings beat increase. In L3Harris's case, both indicators are favorable.

L3Harris’ Earnings ESP: The company has an Earnings ESP of +1.19%. Utilizing our Earnings ESP Filter can help you find the best stocks to buy or sell ahead of earnings reports.

L3Harris’ Zacks Rank: Currently, L3Harris holds a Zacks Rank of #3.

Other Companies to Note in the Sector

There are several other companies in the same sector that also exhibit the right combination of factors for potentially beating earnings in their upcoming releases.

Lockheed Martin (LMT - Free Report) is scheduled to disclose its third-quarter earnings on October 22, before the market opens. The company currently has an Earnings ESP of +1.29% and holds a Zacks Rank of #3. The consensus estimate for Lockheed Martin’s third-quarter earnings is $6.47 per share, with projected sales of $17.28 billion, indicating a 2.4% growth over the prior-year quarter.

Northrop Grumman (NOC - Free Report) is also due to report its third-quarter 2024 results on October 24, prior to market opening. It currently has an Earnings ESP of +1.12% and a Zacks Rank of #2. The consensus estimate for Northrop Grumman’s third-quarter earnings is $6.06 per share, and expected sales stand at $10.23 billion, signaling a 4.7% increase from last year.

Curtiss-Wright Corp. (CW - Free Report) will report its third-quarter earnings on October 30, following the close of the market. It has an Earnings ESP of +0.54% and holds a Zacks Rank of #1. The consensus estimate for third-quarter earnings is $2.70 per share, reflecting a 6.3% increase compared to the previous year. Sales estimates for this quarter suggest a figure of $757 million, indicating a 4.5% rise from last year’s revenues.

L3Harris, Earnings, Sales