L3Harris (LHX) to Report Q3 Earnings: What's in the Cards?

L3Harris Technologies, Inc. LHX is scheduled to release third-quarter 2020 results on Oct 30, before the opening bell.

The company delivered earnings surprise of 8.02% in the last reported quarter.

Moreover, the company’s four-quarter average earnings surprise was 6.72%.

Let’s take a detailed look at some factors that may have influenced the company’s performance in the third quarter.

Factors at Play

During the third quarter, the company launched a technology solution, RASIS (Rapid, Adaptable, Smart, Intelligence, Surveillance and Reconnaissance), which is the new universal signals intelligence (SIGINT) pod. This will enhance ISR capability to aircraft previously only available through major airplane modifications. Moreover, the company completed delivery of its 5,000th WESCAM MX-Series imaging system since its launch in 1997. We believe positive synergies from such innovation and notable deliveries to have contributed to the company’s top line.

L3Harris Technologies Inc Price and EPS Surprise

L3Harris Technologies Inc Price and EPS Surprise

L3Harris Technologies Inc price-eps-surprise | L3Harris Technologies Inc Quote

Further, revenues recognized from earlier defense contracts are also likely to have contributed to the company’s top line in the soon-to-be-reported quarter.   
However, the impact of the ongoing pandemic on commercial aerospace business might have weighed on its commercial aviation unit’s performance, thereby affecting overall revenues.

The Zacks Conensus Estimate for L3Harris’ third-quarter revenues is pegged at $4.50 billion, indicating an increase of 1.5% from the year-ago quarter’s reported figure.

The impacts of COVID-19 failed to slow down the integration procedure of L3 Technologies and Harris Corp. In fact, the company now expects to exceed its savings target by 2020-end. This in turn can be expected to have benefitted the company’s bottom line in the third quarter. Moreover, we believe L3Harris’ costs management initiatives and operational efficiencies must have boosted its margin, thereby boosting its quarterly earnings.

The Zacks Consensus Estimate for L3Harris’ third-quarter earnings of $2.72 per share indicates growth of 5.4% from the year-ago quarter reported figure.
In July 2020, the company completed the previously announced sale of its EOTech business to American Holoptics, an affiliate of Koucar Management. We expect its balance sheet in the upcoming results to duly reflect sale proceeds from this transaction.

What the Zacks Model Says

Our proven model predicts an earnings beat for L3Harris this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

L3Harris has an Earnings ESP of +0.57% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Recent Defense Releases

Lockheed Martin LMT reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.

Hexcel HXL reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.

Teledyne TDY reported third-quarter 2020 adjusted earnings of $2.48 per share, which surpassed the Zacks Consensus Estimate of $2.40 by 3.3%.

Zacks’ 2020 Election Stock Report:

In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.

Check out the 2020 Election Stock Report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Lockheed Martin Corporation (LMT): Free Stock Analysis Report
Hexcel Corporation (HXL): Free Stock Analysis Report
Teledyne Technologies Incorporated (TDY): Free Stock Analysis Report
L3Harris Technologies Inc (LHX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.