Will Segment Sales Benefit L3Harris Technologies in Q3 Earnings?

L3Harris Technologies, Inc. LHX is slated to report third-quarter 2024 results on Oct. 24 after market close.

See the Zacks Earnings Calendar to stay ahead of market-making news.

L3Harris has a four-quarter average earnings surprise of 3.31%. The strong top-line performance across all of the company’s business segments is likely to have boosted its earnings amid the adverse effects of high interest expenses. 

LHX’s IMS Unit: A Mixed Bag
 

Higher sales volume from the maritime business is expected to have favored the Integrated Mission Systems (“IMS”) segment’s quarterly top line.

However, lower sales volume from the commercial aviation business may have partially impacted the IMS segment’s top-line performance.

The Zacks Consensus Estimate for IMS’ third-quarter revenues is currently pegged at $1,632.4 million, which indicates a rise of 4.1% from the year-ago quarter’s reported figure.

LHX’s Other Units to Boost Revenues
 

Strong sales growth volume from Space Systems as well as Intel & Cyber programs is likely to have added impetus to its Space and Airborne Systems (“SAS”) unit’s revenues.

The Zacks Consensus Estimate for the SAS segment’s revenues is pegged at $1,739.5 million, which indicates an improvement of 3.2% from the year-ago quarter’s reported number.

Higher sales volume from the Tactical Communication business, as well as that of Broadband Communications, is expected to have boosted the Communication Systems unit’s top-line performance.

The Zacks Consensus Estimate for this unit’s revenues is pegged at $1,353.3 million, which implies growth of 7.8% from the prior-year quarter’s reported actuals.

Q3 Estimates for LHX
 

With its major three segments reflecting solid growth expectations for revenues, we may expect LHX to report notable growth in its top line in the quarter to be reported. Also, positive synergies from the acquisition of Aerojet Rocketdyne may add impetus to LHX’s third-quarter results.

The Zacks Consensus Estimate for third-quarter sales is pegged at $5.30 billion, which indicates growth of 7.9% from the prior-year quarter’s reported figure.

Solid sales growth expectations must have benefited LHX’s bottom-line performance. Moreover, improved operating margins, driven by operational improvements, favorable program performance and the company’s cost reduction initiatives, are likely to have benefited its earnings.

However, higher interest expenses might have some adverse impacts on its overall earnings growth.

The consensus estimate for third-quarter earnings is pegged at $3.26 per share, which implies an increase of 2.2% from the year-ago quarter’s level.

What the Zacks Model Unveils for LHX

Our proven model predicts an earnings beat for L3Harris Technologies this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here, as you will see below.

LHX’s Earnings ESP: L3Harris has an Earnings ESP of +1.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

LHX’s Zacks Rank: Currently, LHX carries a Zacks Rank #3.

Other Stocks to Consider
 

Here, we have mentioned the following players from the same sector that also have the right combination of elements to beat on earnings in the upcoming releases.

Lockheed Martin LMT is set to report third-quarter earnings on Oct. 22 before market open. It has an Earnings ESP of +1.29% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for LMT’s third-quarter earnings is pegged at $6.47 per share. The Zacks Consensus Estimate for third-quarter sales is pegged at $17.28 billion, which implies a 2.4% increase from that reported in the prior-year quarter.

Northrop Grumman NOC is slated to report its third-quarter 2024 results on Oct. 24 before market open. It has an Earnings ESP of +1.12% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for NOC’s third-quarter earnings stands at $6.06 per share. The Zacks Consensus Estimate for third-quarter sales is pegged at $10.23 billion, which implies a 4.7% increase from that reported in the prior-year quarter.

Curtiss-Wright Corp. CW is set to report third-quarter earnings on Oct. 30 after market close. It has an Earnings ESP of +0.54% and sports a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $2.70 per share, indicating an improvement of 6.3% from the prior-year quarter’s reported actuals.  The Zacks Consensus Estimate for sales is pegged at $757 million, which implies a 4.5% increase from the top line reported in the prior-year quarter.

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Lockheed Martin Corporation (LMT): Free Stock Analysis Report
 
Northrop Grumman Corporation (NOC): Free Stock Analysis Report
 
Curtiss-Wright Corporation (CW): Free Stock Analysis Report
 
L3Harris Technologies Inc (LHX): Free Stock Analysis Report

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