Al Root
L3Harris Technologies reported strong first-quarter results, which were good enough to keep the stock relatively stable in early trading. That's a win for a defense contractor these days.
On Thursday morning, L3Harris reported unadjusted earnings per share of $2.72 from sales of $5.7 billion. Wall Street was looking for earnings per share of $2.58 from sales of $5.4 billion, according to FactSet. A year ago, L3Harris reported unadjusted earnings per share of $2.04 and adjusted earnings per share of $2.41 from sales of $5.1 billion.
Sales were up in all segments: space, communications, and missiles. Orders were $7.8 billion, above sales, for a book-to-bill ratio of 1.4 times.
Looking ahead, management now expects unadjusted 2026 earnings per share to be between $11.40 and $11.60. Prior guidance given in January called for diluted earnings per share in the range of $11.30 to $11.50.
Sales guidance remained unchanged at $23 billion to $23.5 billion.
Shares were down 1.1% at $318.01, while S&P 500 and Dow Jones Industrial Average futures were up 0.2% and 0.6%, respectively.
A move down after solid earnings and an EPS guidance boost might feel surprising, but investors have been nervous about defense stocks lately. Coming into Thursday trading, L3Harris stock was down about 12% since the start of fighting in Iran, trailing the S&P 500 by almost 16 percentage points.
To be sure, defense spending is on the rise, but some of that is reflected in stock prices. L3Harris trades for about 26 times earnings expected over the coming 12 months, up from 20 times a year ago. Now, investors are worried that spending growth could be pressured if Democrats win the Senate in the midterm elections.
Guidance includes L3Harris' missile business, which will be spun off later this year.
Along with earnings, L3Harris said it filed a confidential IPO registration statement for the missile business. Such filings aren't surprising. These days, they are a relatively routine step in the IPO process. The filing means investors will get a look at business details in a few weeks.
The IPO is planned for the second half of 2026.
Coming into Thursday trading, shares were up 9% year to date and up 45% over the next 12 months.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 30, 2026 09:29 ET (13:29 GMT)
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