L3Harris Technologies Inc

Revenue and Guidance: L3Harris Technologies reported Q1 revenue of $5.1 billion, reflecting flat organic growth, and updated its 2025 revenue guidance to $21.4 to $21.7 billion, incorporating a solid Q1 performance despite the divestiture of its commercial aviation solutions business which accounted for a $525 million revenue impact. The company aims for $23 billion in revenue by 2026, which translates to a projected 7% organic growth rate.

Profitability and Margins: The company achieved a segment operating margin of 15.6%, marking six consecutive quarters of year-over-year margin expansion. Non-GAAP EPS was reported at $2.41, up 7% YoY. However, the company anticipates operating margin guidance in the mid to high 15% range for 2025, which reflects dilution from the CAS divestiture.

Challenges and Risks: Operational challenges were noted in certain fixed-price development programs, particularly within classified programs. These challenges led to negative adjustments amounting to tens of millions of dollars, which may impact margins in the near term but are expected to stabilize in 2025-2026 as these programs near completion.