Will Segment Sales Benefit L3Harris Technologies in Q3 Earnings?

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

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L3Harris has demonstrated a good track record, averaging an earnings surprise of 3.31% over the last four quarters. Overall revenue growth is expected across the company's various business segments, which may help to offset the negative impact of higher interest expenses incurred during the period.

LHX’s Integrated Mission Systems Unit: A Mixed Performance

This quarter, the Integrated Mission Systems (IMS) segment is anticipated to benefit from increased sales in its maritime operations. On the other hand, a decline in sales from the commercial aviation segment could partially hinder the IMS's revenue performance.

The Zacks Consensus Estimate for IMS revenues in the third quarter stands at $1,632.4 million, which marks a 4.1% increase from the previous year’s figure.

Other Units Expected to Contribute to Revenue Growth

Sales from Space Systems and the Intelligence & Cyber programs are likely to positively influence revenues for the Space and Airborne Systems (SAS) unit. The Zacks Consensus Estimate for SAS revenues is currently at $1,739.5 million, reflecting a 3.2% increase compared to the same period last year.

In the Communication Systems unit, substantial growth is anticipated from both the Tactical Communication and Broadband Communications sectors. The expected revenue for this unit stands at $1,353.3 million, which indicates a growth of 7.8% from the year-ago quarter.

Q3 Revenue and Earnings Projections for LHX

Given that LHX's major segments have promising revenue growth expectations, strong overall sales growth is anticipated for the upcoming quarter. Additionally, positive synergies from the acquisition of Aerojet Rocketdyne are likely to further enhance LHX’s Q3 earnings.

The consensus estimate for total sales in the third quarter is set at $5.30 billion, indicating a growth of 7.9% compared to the previous year's quarter.

With solid expectations for sales growth, LHX is likely to experience a boost in its earnings as well. Furthermore, improvements in operating margins driven by enhanced operations, effective program outcomes, and cost-reduction efforts are predicted to support the company's earnings.

Nevertheless, the impact of increased interest expenses might create some challenges for overall earnings growth.

The consensus estimate for L3Harris’s earnings in Q3 stands at $3.26 per share, reflecting an increase of 2.2% from the same period last year.

Insights from the Zacks Model for LHX

The Zacks model suggests that L3Harris Technologies may achieve an earnings beat this quarter. A positive Earnings ESP, coupled with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold), increases the likelihood of an earnings surprise, which is evident in LHX's current situation.

LHX’s Earnings ESP: L3Harris has an Earnings ESP of +1.19%. Access our Earnings ESP Filter to identify the best stocks for pre-report analysis.

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

Other Companies to Consider

Several other companies within the same sector also show strong potential for exceeding earnings expectations in their upcoming reports.

Lockheed Martin (LMT - Free Report) is scheduled to report earnings for the third quarter on October 22, prior to market open. Lockheed holds an Earnings ESP of +1.29% and has a current Zacks Rank of 3. The Zacks Consensus for LMT’s third-quarter earnings is $6.47 per share, and sales are estimated at $17.28 billion, representing a 2.4% increase from the previous year.

Northrop Grumman (NOC - Free Report) will report its third-quarter results on October 24, prior to the market opening. Northrop has an Earnings ESP of +1.12% and is currently rated Zacks Rank 2. The consensus estimate for NOC's earnings in the third quarter stands at $6.06 per share, with anticipated sales of $10.23 billion, reflecting a 4.7% increase year-over-year.

Curtiss-Wright Corp. (CW - Free Report) is also set to report Q3 earnings on October 30, after market close. It has an Earnings ESP of +0.54% and currently carries a Zacks Rank of 1. The consensus for third-quarter earnings stands at $2.70 per share, showing a 6.3% improvement from the last year, while sales are estimated at $757 million, indicating a 4.5% growth year-over-year.

Earnings, Companies, Growth