L3Harris Reports Second Quarter 2020 Results

The comparison to prior-year GAAP segment operating results is not meaningful because this segment is comprised largely of former L3 businesses. Second quarter revenue decreased 17% versus prior-year pro forma and 7.4% on an organic8 basis, driven by COVID-19-related impacts in the commercial aviation business, which was down in-line with expectations, partially offset by classified growth in Defense Aviation Products. Second quarter operating income decreased versus prior-year pro forma due to COVID-19-related impacts and divestiture-related charges. Second quarter non-GAAP8 operating income decreased 8% to $100 million versus prior-year pro forma. Second quarter non-GAAP operating margin expanded 120 bps versus prior-year pro forma to 12.5%, as operational efficiencies, integration benefits, cost management and restructuring savings were partially offset by COVID-19-related headwinds.

Segment funded book-to-bill was 1.26 for the quarter and 1.13 since the merger.

Order growth was solid in the second quarter with strength in defense-related businesses. In Defense Aviation Products, the company was awarded $45 million in orders for combat propulsion systems in support of the U.S. Army's ground vehicle recapitalization strategy, increasing the contract value to-date to over $500 million, and a $73 million award for radars supporting the E-2D aircraft. In addition, the company was awarded a $975 million IDIQ to provide real-time responsive airborne ISR solutions to the U.S. Special Operations Command supporting Mid-Endurance Unmanned Aircraft Systems.

L3Harris furthered its position in Military Training with a $900 million single-award IDIQ to develop and manage simulator common architecture requirements and standards across the U.S. Air Force's portfolio.

Cash and Capital Deployment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ millions)

Second Quarter

 

First Half

 

 

 

2020

 

2019

 

Change

 

2020

 

2019

 

Change

 

 

Operating cash flow

$

802

 

 

$

311

 

 

$

491

 

 

$

1,335

 

 

$

716

 

 

$

619

 

 

 

Adjusted free cash flow10

$

785

 

 

$

267

 

 

$

518

 

 

$

1,318

 

 

$

646

 

 

$

672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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