L3harris Technologies, Inc. · NYSE:LHX
L3harris Technologies — Harris — Q2 FY2019 Earnings Presentation
15 slides from L3harris Technologies's earnings presentation, Jan 29, 2019
Slide 1: Fiscal 2019 Second Quarter Earnings Call Presentation
FISCAL 2019 SECOND QUARTER EARNINGS CALL PRESENTATION HARRIS.COM | #HARRISCORP
Slide 2: Forward-looking statements
Forward-looking statements Statements in this presentation that are not historical facts are forward-looking statements that reflect management's current expectations, assumptions and estimates of future performance and economic conditions. Such statements are made in reliance on the safe harbor pro
Slide 3: 2Q19: Strong progress against strategic priorities
2Q19: Strong progress against strategic priorities • Revenue up 9% with strong growth across all segments Accelerate revenue growth 1 • Orders up 27% to $1.8B...book-to-bill 1.06 across all 3 segments • Year-over-year funded backlog growth of ~20% Company margin • EPS1 up 19% to a record $1.96 2 exp
Slide 4: Key highlights
Key highlights Communication Systems Electronic Systems Space & Intelligence Systems • Revenue up 10%...strong growth in all three • Revenue up 6%...seventh consecutive quarter of • Revenue up 11%...high teens growth in businesses growth Classified partially offset by Environmental – Tactical up...f
Slide 5: Strong 2Q19 and 1H19 financial results
Strong 2Q19 and 1H19 financial results ($million, except per share amounts) Revenue EBIT1 and margin1 3,208 627 2,945 + 9% 547 + 15% 1,535 1,666 327 19.5% + 9% 278 + 18% 18.6% 19.6% 18.1% 2Q18 2Q19 1H18 1H19 2Q18 2Q19 1H18 1H19 EPS Cash flow GAAP 1.08 1.88 2.44 3.66 Operating 278 352 373 469 cash fl
Slide 6: 2Q EPS bridge
2Q EPS1 bridge $(0.04) $1.96 - Tax reform $0.35 $1.65 + Tactical, Avionics and Classified space volume + Operational efficiencies + Program execution - Environmental volume - R&D 2Q18 Operations Tax 2Q19 1 Non-GAAP EPS excludes, as applicable, 2Q19 L3 deal and integration costs, and prior-year non-c
Slide 7: Communication Systems
Communication Systems Revenue 1,009 898 + 12% • 2Q revenue up 10%, 1H up 12% 540 492 + 10% – Tactical Comms revenue up 11% in 1H – DoD up 17% and International up 7% – Public Safety and Night Vision up double digits in 1H 2Q18 2Q19 1H18 1H19 Operating income and margin • 2Q operating income up 12%;
Slide 8: Electronic Systems
Electronic Systems Revenue 1,206 1,123 + 7% • 2Q revenue up 6%; 1H up 7% 582 617 + 6% – Double-digit growth in long-term platforms (F-35, F/A-18, F-16) and rotary platforms 2Q18 2Q19 1H18 1H19 • 2Q operating income up 21%; 1H up 13% Operating income and margin • 2Q margin expanded 230 bps; 1H margin
Slide 9: Space & Intelligence Systems
Space & Intelligence Systems Revenue 1,001 928 + 8% • 2Q revenue up 11%; 1H up 8% 513 462 + 11% – Classified growth partially offset by environmental programs 2Q18 2Q19 1H18 1H19 • 2Q operating income up 15%; 1H up 7% Operating income and margin 167 178 • 2Q margin expanded 60 bps to 17.9%; 1H margi
Slide 10: EPS bridges
EPS bridges FY19 EPS guidance bridge FY19 EPS YoY bridge $(0.03) $7.90 - $8.001 $7.95 - $8.001 $7.90 $7.95 $0.13 - Interest rates $0.55 $0.05 $7.80 - $7.90 $7.85 + Tax planning + Tax reform + CS & SIS volume $0.91 - $1.01 $0.96 + ES operational efficiencies 2 $6.39 $6.39 + Volume + Operational effic
Slide 11: FY19 guidance summary
FY19 guidance summary Total Harris By Segment Revenue Margin1 Revenue Margin1 CS up 10.0 – 11.0% 29.5 – 30.5% 8.0 - 8.5% 19.5 - 20.0% + versus up 9 – 10% + versus up 6.0 - 8.0% + versus 19.3 - 19.7% ES up 7.0 – 8.0% 18.5 – 19.5% EPS 1 FCF 2 + versus 18 – 19% $7.90 - $8.00 $1.000 - $1.025B SIS up 6.0
Slide 12: Appendix
Appendix
Slide 13: Other information
Other information ($million except noted) FY18 2Q19 1H19 FY19 Amortization of Exelis acquisition intangibles $101 $26 $51 ~$101 CHQ costs (non-GAAP) $60 $18 $35 $55-60 FAS pension expense/(income)1 $(120) $(30) $(60) ~($120) Net capital expenditures $136 $36 $67 ~$170 Net interest expense $167 $43 $
Slide 14: Supplemental information - tactical communications history
Supplemental information - tactical communications history ($million) YTD 2Q18 3Q18 4Q18 1Q19 2Q19 FY17 FY18 FY19 Orders 353 332 389 502 448 1,242 1,755 950 Sales 354 340 377 334 386 1,230 1,367 720 DoD 159 121 139 144 170 392 530 314 International 195 219 238 190 216 838 837 406 Funded Backlog1 862
Slide 15: Medium term outlook
Medium term outlook Fiscal 2019 Second Quarter Earnings Presentation | 15