L3HARRIS TECHNOLOGIES, INC. /DE/ (LHX): Results of Operations and Financial Condition
L3HARRIS TECHNOLOGIES, INC. /DE/ (LHX) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Earnings Release L3Harris Technologies Reports Robust Second Quarter 2026 Results MELBOURNE, Fla., July 29, 2026 — L3Harris Technologies (NYSE: LHX) reports second quarter 2026 results. Highlights • Orders of $7.3 billion; book-to-bill of 1.2x increases backlog to re
How this was made
The 30-second read
Why it matters
Traders can update valuation and positioning based on the combination of record backlog, improved operating margin, strong cash generation, and explicit 2026 guidance range increases.
Market read
Record orders and backlog plus raised guidance are the core catalysts for estimate revisions and sentiment in defense industrials.
What to watch
Backlog is record, but the release also notes margin headwinds from missing prior-year asset-sale gains and higher R&D and selling/marketing expenses, which could pressure future quarters if program performance slips.
L3Harris Technologies Reports Robust Second Quarter 2026 Results
Second-quarter revenue increased 8%, GAAP diluted EPS increased 28% to $3.13, operating cash flow and free cash flow each increased 37%, and the company increased 2026 consolidated revenue and GAAP EPS guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $ 5,881 million | – | 8% |
| Cost of revenueGAAP | $ (4,379) million | – | – |
| General and administrative expensesGAAP | $ (848) million | – | – |
| Operating incomeGAAP | $ 654 million | – | 15% |
| Operating marginGAAP | 11.1 % | – | 60 bps |
| Segment operating incomenon-GAAP | $ 942 million | – | 9% |
| Segment operating marginnon-GAAP | 16.0 % | – | 10 bps |
| Non-service FAS pension income and other, netGAAP | $ 185 million | – | – |
| Interest expense, netGAAP | $ (129) million | – | – |
| Income before income taxesGAAP | $ 710 million | – | – |
| Income tax expenseGAAP | $ (110) million | – | – |
| Effective tax rateGAAP | 15.5 % | – | – |
| Net incomeGAAP | $ 600 million | – | – |
| Subsidiary preferred stock deemed dividendGAAP | $ (14) million | – | – |
| Net income available to common shareholdersGAAP | $ 586 million | – | – |
| Basic earnings per share available to common shareholdersGAAP | $ 3.15 | – | – |
| Diluted EPSGAAP | $ 3.13 | – | 28% |
| Diluted weighted-average common shares outstandingGAAP | 187.3 | – | – |
| Cash from operationsGAAP | $ 879 million | – | 37% |
| Free cash flownon-GAAP | $ 771 million | – | 37% |
| Capital expendituresother | $ 108 million | – | – |
| Year-to-date revenueGAAP | $ 11,625 million | – | – |
| Year-to-date operating incomeGAAP | $ 1,306 million | – | – |
| Year-to-date operating marginGAAP | 11.2 % | – | – |
| Year-to-date segment operating incomenon-GAAP | $ 1,844 million | – | – |
| Year-to-date segment operating marginnon-GAAP | 15.9 % | – | – |
| Year-to-date effective tax rateGAAP | 14.4 % | – | – |
| Year-to-date net incomeGAAP | $ 1,112 million | – | – |
| Year-to-date diluted EPSGAAP | $ 5.85 | – | – |
| Year-to-date cash from operationsGAAP | $ 784 million | – | – |
| Year-to-date free cash flownon-GAAP | $ 584 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Space & Mission SystemsHigher revenues of $81 million in ISR from higher volumes on missionized aircraft programs, $76 million in Space Systems from higher volumes on classified space programs, $40 million in Mission Networks from higher FAA volume and $34 million in Airborne Solutions from higher F-35 volumes, partially offset by lower revenue in Intel and Cyber from lower classified program volume. | $ 2,966 million | – | 7% |
| Communications & Spectrum DominanceHigher revenue of $70 million in Mission Critical Communications associated with increased international deliveries for software-defined resilient communications equipment and higher revenue in Spectrum Superiority from program ramps, partially offset by lower volume in Targeting and Sensor Systems. | $ 1,943 million | – | 4% |
| Missile SolutionsHigher revenue of $85 million in Propulsion Systems and $44 million in Advanced Effects from higher volumes and program ramps. | $ 1,054 million | – | 14% |
2026 outlook
- Revenue$23.2B - $23.7B
- NoteGAAP diluted EPS: $11.80 - $12.00
- NoteCash from operations: $3.6B
- NoteFree cash flow: $3.0B
- NoteSegment operating margin: low 16%
- NoteSpace & Mission Systems revenue: ~$11,700; operating margin: mid 10%
- NoteCommunications & Spectrum Dominance revenue: ~$8,000; operating margin: mid 25%
- NoteMissile Solutions revenue: ~$4,100; operating margin: low 12%
- NoteNet cash provided by operating activities is anticipated to be approximately $3.6 billion and capital expenditures are anticipated to be approximately $600 million.
Capital returns
- Repurchases of common stock: $ 229 million in the second quarter; $ 525 million year to date.
- Dividends paid: $ 232 million in the second quarter; $ 470 million year to date.
What drove it
- Orders of $7.3 billion and book-to-bill of 1.2x increased backlog to a record $42 billion.
- Consolidated revenue growth was driven by growth across all segments resulting from new program starts and strong execution against record backlog.
- Operating-income improvement was driven by increased segment operating income, primarily at Communications & Spectrum Dominance, and lower corporate and other expense.
- Segment operating income grew across all segments due to increased volume and improved program performance.
- GAAP EPS benefited from higher volume, improved program performance, lower corporate and other expense, including the non-cash preferred stock deemed dividend.
Concerns
- Space & Mission Systems operating margin decreased 60 bps to 9.8%, driven by the absence of a $75 million gain recognized in connection with the sale of assets from a product line in second quarter 2025.
- Segment operating income was partially offset by the absence of $92 million in gains recognized in connection with the sale of assets in second quarter 2025 and increased research and development costs.
- Communications & Spectrum Dominance margin faced increased investments in research and development, higher selling and marketing expenses, and the absence of a $17 million gain recognized in connection with the sale of assets from a product line in second quarter 2025.
- Missile Solutions operating margin decreased 20 bps to 12.3%, driven by the absence of a favorable contract resolution during second quarter 2025.
- GAAP EPS was partially offset by lower net asset and investment gains.
What to watch
- Conversion of the record $42 billion backlog and new program starts into revenue.
- Execution and margin development at Space & Mission Systems, where second-quarter operating margin was 9.8%.
- Communications & Spectrum Dominance international deliveries, program ramps, research and development investments, and selling and marketing expenses.
- Cash conversion against anticipated net cash provided by operating activities of approximately $3.6 billion and capital expenditures of approximately $600 million.
- Progress against increased 2026 consolidated revenue guidance of $23.2B - $23.7B and GAAP diluted EPS guidance of $11.80 - $12.00.
Balance sheet and cash flow
- Cash and cash equivalents: $ 1,521 million at July 3, 2026; $ 1,069 million at January 2, 2026.
- Current portion of long-term debt: $ 1,815 million at July 3, 2026; $ 673 million at January 2, 2026.
- Long-term debt, net: $ 9,184 million at July 3, 2026; $ 10,443 million at January 2, 2026.
- Operating cash flow was $ 879 million, driven by higher net income and working capital timing.
- Free cash flow was $ 771 million, with capital expenditures of $ 108 million.
Analysis
L3Harris reported a robust second quarter, with revenue of $ 5,881 million, up 8%, and GAAP operating income of $ 654 million, up 15%. GAAP operating margin increased 60 bps to 11.1%, while GAAP diluted EPS increased 28% to $ 3.13. Management attributed revenue growth to new program starts, execution against record backlog, and growth across all segments.
The three operating segments each expanded revenue. Space & Mission Systems generated $ 2,966 million of revenue, up 7%, but its operating margin declined 60 bps to 9.8% following the absence of a prior-year asset-sale gain. Communications & Spectrum Dominance revenue increased 4% to $ 1,943 million and operating margin increased 230 bps to 26.9%, supported by international volume and segment investment income. Missile Solutions delivered the fastest revenue growth at 14% to $ 1,054 million, while operating margin declined 20 bps to 12.3% because a favorable prior-year contract resolution did not recur.
Cash generation strengthened materially in the quarter. Cash from operations was $ 879 million and free cash flow was $ 771 million, both up 37%, with operating cash flow driven by higher net income and working capital timing. The company repurchased $ 229 million of common stock and paid $ 232 million of dividends during the quarter. Cash and cash equivalents were $ 1,521 million at July 3, 2026, while current long-term debt was $ 1,815 million and long-term debt, net was $ 9,184 million.
Demand indicators were strong, with orders of $7.3 billion, book-to-bill of 1.2x, and a record $42 billion backlog. L3Harris increased 2026 consolidated revenue guidance to $23.2B - $23.7B from $23B - $23.5B and GAAP diluted EPS guidance to $11.80 - $12.00 from $11.40 - $11.60. The guide also calls for $3.6B of cash from operations and $3.0B of free cash flow. Margin execution at Space & Mission Systems and the effect of research and development, selling and marketing, and nonrecurring prior-year gains remain key items for the balance of 2026.
Management, verbatim
Our Trusted Disruptor culture, underpinned by early and strategic investments and leveraging our commercial business model, continues to deliver results. We deploy capabilities to support the warfighter's need to sense, connect and respond, addressing today’s complex threat environment quickly and at scale.
Christopher Kubasik, Chairman and CEO
Our purpose-built portfolio and focus on execution drove outstanding second quarter results. Strong orders, record backlog and double-digit first half growth reinforce our multi-year track record of delivering on our financial commitments.
Christopher Kubasik, Chairman and CEO
Not in the filing
stated, not guessed- Previous-release outlook document for formal comparison of actual results against prior guidance.
- Gross margin.
- Non-GAAP EPS.
- Quarter-over-quarter comparisons for reported financial metrics.
- Forward guidance for gross margin, operating expenses, and tax rate.
- Complete balance-sheet information beyond the portion of the table included in the provided filing text.
- Year-to-date basic weighted-average common shares outstanding.
- Year-to-date diluted weighted-average common shares outstanding.
- Year-to-date basic earnings per share available to common shareholders.
- Year-to-date net income available to common shareholders.
- Year-to-date income before income taxes.
- Year-to-date income tax expense.
- Year-to-date cost of revenue.
- Year-to-date general and administrative expenses.
- Year-to-date non-service FAS pension income and other, net.
- Year-to-date interest expense, net.
- Segment operating income and operating margin comparisons by segment were not included as key-metric fields because the supplied structured segment format supports revenue only.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
SEC Form 8-K Item 2.02 includes Exhibit 99.1 earnings release for L3Harris’ second quarter 2026 results and updated full-year guidance.
Ticker impact
L3Harris reported Q2 2026 results with $7.3B orders, record $42B backlog, and raised 2026 revenue and EPS guidance.
Likely positive near-term bias as guidance and backlog strength support higher forward estimates, though magnitude depends on prior expectations.
This is a primary-source 8-K earnings release with quantified orders, backlog, EPS, cash flow, and updated full-year guidance ranges.
Market effects
Reinforces read-across for defense primes and communications/spectrum and missile supply chains via backlog and margin expansion signals.
Primarily US defense industrial sentiment; limited direct regional macro linkage beyond defense spending expectations.
International delivery and classified program execution references may support broader NATO-aligned procurement sentiment.
Counterpoint
Guidance increases may already be partially priced; segment margin changes include offsets (absence of prior-year gains, higher R&D), so earnings quality may be less linear than headline strength suggests.
Key entities
- public_companyL3Harris Technologies, Inc.
Defense electronics and communications/missile systems provider reporting Q2 2026 results and raising 2026 consolidated revenue and EPS guidance.
