L3Harris Reports Merger Gains in Q1, Revises Full-Year Outlook
L3Harris Technologies shared its First Quarter (Q1) 2020 results on Tuesday, reporting $4.6 billion in revenue, up 168% from Q1 2019 GAAP. Net income was $194 million, a 20% decrease from the same time period in 2019 GAAP. The revenue increased because L3 operations were included in the results after the merger of the former L3 and Harris, which closed in July 2019.
Space and Airborne systems saw a double-digit revenue increase, with about $1.2 billion in revenue in Q1, a 25% increase in GAAP from $956 million in Q1 2019. The company attributed the increase to the post-merger inclusion of L3 operations in the results.
Chairman and CEO Bill Brown said on a Tuesday investor call that while the company has a resilient portfolio and customer base and is well-positioned, the company is not immune to the effects of the COVDI-19 pandemic.
For that reason, L3Harris updated its guidance for 2020 in light of the COVID-19 pandemic, projecting revenue in a range of $18.3 billion to $18.6 billion, which would provide organic growth of 3% to 5% on an adjusted pro forma basis. This is a reduction from the previous growth range of up 5% to 7%. The company said the downturn in commercial aerospace business, weakness in international and public safety demand, and risks from supply chain disruptions are the contributing factors.
“Our core U.S. government business, which represents about 75% of revenue, is performing well and without significant challenges,” Brown said.
The CEO also said the company has mandated work from home when possible and implemented social distancing and shifts in its production facilities. He said all company facilities are up and running with limited disruption so far.