NYSE:LHX
L3HARRIS TECHNOLOGIES, INC. /DE/
A leading US defense and aerospace technology provider specializing in secure communications, sensors, and avionics systems for government and commercial sectors.
Key Metrics
Investment Thesis
Bull Case
Investors should consider L3Harris for its consistent double-digit revenue growth trajectory and high-margin technology moat in the critical defense sector. The expanding commercial aerospace division offers a non-defense growth engine that diversifies risk beyond government contracts. Strong cash flow generation allows for continued capital allocation through buybacks and dividends, supporting long-term shareholder value creation.
Bear Case
The heavy reliance on government spending makes the stock vulnerable to fiscal policy shifts and potential budget cuts in defense programs. High levels of goodwill ($20.01B) and accumulated intangible assets ($6.51B) could impair earnings if acquisition synergies fail to materialize as expected. Regulatory scrutiny regarding defense contracts and export controls may increase compliance costs or limit market access in key growth regions.
About L3HARRIS TECHNOLOGIES, INC. /DE/
L3Harris Technologies Inc. is a premier global technology company serving defense, intelligence, public safety, commercial aerospace, and telecommunications markets. The company designs, manufactures, and integrates mission-critical systems including secure communications, sensors, avionics, and electronic warfare solutions for government and commercial clients worldwide.
Analysis
Management Discussion
The company demonstrated strong financial resilience with revenue growing from $17.06B in 2022 to an estimated $21.32B by 2025, reflecting sustained demand for advanced defense capabilities. Net income expanded consistently over this period, rising from $1.06B in 2022 to $1.61B in 2026, supported by operating profits exceeding $2 billion and healthy free cash flow generation of $3.11B. The balance sheet remains solid with $1.07B in cash and equivalents against manageable debt levels, while share repurchases and dividends returned significant capital to shareholders.
Industry Overview
The defense and aerospace technology industry is characterized by high barriers to entry, long contract cycles, and a steady demand for secure communication and sensing solutions driven by geopolitical tensions. Companies must maintain rigorous security certifications and invest heavily in R&D to keep pace with evolving threats like cyber warfare and hypersonic missiles. Consolidation is common as smaller firms acquire niche technologies, but established players like L3Harris benefit from scale and full-system integration capabilities.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2025 | 2026 |
|---|---|---|---|---|
| Revenue | $17.06B | $19.42B | $21.32B | — |
| Cost of Revenue | $12.13B | $14.31B | $15.80B | $0 |
| Gross Profit | $4.93B | $5.11B | $5.52B | — |
| Operating Expenses | $3.10B | $3.69B | $3.61B | — |
| Operating Income | $1.83B | $1.43B | $1.92B | $2.11B |
| G&A | $3.00B | $3.26B | $3.57B | $3.43B |
| Stock-Based Comp | $109.0M | $89.0M | $97.0M | $113.0M |
| D&A | $938.0M | $1.17B | $1.29B | $1.22B |
| Amortization | $605.0M | $779.0M | $853.0M | $770.0M |
| Other OpEx | $103.0M | $425.0M | $38.0M | — |
| Non-Operating Income | $-553.0M | $-205.0M | $-321.0M | $-178.0M |
| Pre-Tax Income | $1.27B | $1.22B | $1.60B | $1.93B |
| Income Tax | $212.0M | $23.0M | $85.0M | $326.0M |
| Continuing Ops | $1.06B | $1.20B | $1.51B | $1.61B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $1.06B | $1.20B | $1.51B | $1.61B |
| Minority Interest | $-1.0M | $-29.0M | $10.0M | $0 |
| Net to Common | $1.06B | $1.23B | $1.50B | $1.61B |
| Metric | 2022 | 2023 | 2025 | 2026 |
|---|---|---|---|---|
| Current Assets | $6.75B | $8.05B | $8.22B | $8.59B |
| Cash & Equivalents | $880.0M | $560.0M | $615.0M | $1.07B |
| Accounts Receivable | $1.25B | $1.23B | $1.07B | $1.37B |
| Inventory | $1.29B | $1.47B | $1.33B | $1.22B |
| Other Current Assets | $3.33B | $4.79B | $5.20B | $4.93B |
| Long-Term Assets | $26.77B | $33.63B | $33.78B | $32.60B |
| Intangibles | $6.00B | $8.54B | $7.64B | $6.51B |
| Goodwill | $17.28B | $19.98B | $20.32B | $20.01B |
| Operating Leases | $756.0M | $743.0M | $684.0M | $717.0M |
| Other LT Assets | $2.73B | $4.37B | $5.13B | $5.28B |
| Total Assets | $33.52B | $41.69B | $42.00B | $41.20B |
| Current Liabilities | $5.78B | $8.00B | $7.63B | $7.23B |
| Accounts Payable | $1.95B | $2.11B | $2.00B | $2.46B |
| Current Leases | $121.0M | $120.0M | — | $132.0M |
| Deferred Revenue | $1.40B | $1.90B | $2.14B | $2.26B |
| Taxes Payable | $376.0M | $88.0M | $29.0M | — |
| Other Current Liab | $1.93B | $3.79B | $3.46B | $2.37B |
| Long-Term Liabilities | $9.12B | $14.85B | $14.79B | $14.33B |
| Long-Term Debt | $6.22B | $11.16B | $11.08B | $10.44B |
| LT Operating Leases | $741.0M | $705.0M | $601.0M | $653.0M |
| Other LT Liab | $2.04B | $2.90B | $3.02B | $3.13B |
| Total Liabilities | $14.90B | $22.86B | $22.42B | $21.56B |
| Shareholders' Equity | $18.62B | $18.83B | $19.58B | $19.64B |
| Retained Earnings | $2.94B | $3.22B | $3.74B | $4.21B |
| AOCI | $-288.0M | $-198.0M | $27.0M | $119.0M |
| Total L&E | $33.52B | $41.69B | $42.00B | $41.20B |
| Metric | 2022 | 2023 | 2025 | 2026 |
|---|---|---|---|---|
| Net Income (CFO) | $1.06B | $1.20B | $1.51B | $1.61B |
| Non-Cash Adjustments | $-630.0M | $362.0M | $1.33B | $319.0M |
| Working Capital Changes | $1.73B | $536.0M | $-285.0M | $1.18B |
| Cash from Operations | $2.16B | $2.10B | $2.56B | $3.11B |
| Capital Expenditures | $252.0M | $449.0M | $408.0M | $424.0M |
| Cash from Investing | $-250.0M | $-7.02B | $-263.0M | $407.0M |
| Debt Issuances | $4.0M | — | — | — |
| Debt Repayments | $14.0M | — | — | — |
| Share Buybacks | $1.08B | $518.0M | $554.0M | $1.15B |
| Dividends Paid | $864.0M | $868.0M | $886.0M | $903.0M |
| Cash from Financing | $-1.95B | $4.59B | $-2.22B | $-3.08B |
| FX Effect | $-18.0M | $11.0M | $-17.0M | $23.0M |
| Net Change in Cash | $-61.0M | $-320.0M | $55.0M | $454.0M |
| Beginning Cash | $941.0M | $880.0M | $560.0M | $615.0M |
| Ending Cash | $880.0M | $560.0M | $615.0M | $1.07B |
Frequently Asked Questions
How does L3HARRIS TECHNOLOGIES, INC. /DE/ make money?
Revenue is driven by four core segments: Secure Communications, Sensors and Information Systems, Avionics and Integrated Avionics, and Electronic Warfare. These segments leverage a diversified portfolio of products ranging from tactical radios and satellite terminals to advanced radar arrays and mission planning software across both domestic and international defense contracts.
What are the main risks for LHX?
Significant exposure to federal budget cycles and potential reductions in defense spending could impact order volumes and pricing power. Supply chain disruptions or component shortages, particularly for specialized semiconductors, may delay deliveries and erode profit margins. Geopolitical instability or trade restrictions affecting international markets could disrupt export opportunities for sensitive defense technologies.
What is LHX's competitive advantage?
The company possesses deep proprietary technology in secure communications and electronic warfare that creates high barriers to entry for competitors. Its diverse customer base spanning DoD, intelligence agencies, and commercial aerospace provides revenue stability against sector-specific downturns. A robust global supply chain and extensive manufacturing footprint ensure reliable delivery of complex systems required for national security missions.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.