L3Harris Technologies Inc

Solid Q2 momentum + raised 2026 guidance (good) - Q2 orders: $7.3B, book-to-bill 1.2x (TTM 1.3x); backlog +$1B to $42B. - Revenue: $5.9B, +8% YoY (broad-based across all 3 segments). - Profitability: segment operating income +$79M (+9%); segment operating margin 16% (+10 bps). - Earnings/cash: GAAP EPS $3.13 (+28%); free cash flow (FCF) $771M (+37%); FCF YTD $584M, $124M ahead of prior year. - Guidance raised: FY2026 revenue to $23.2B–$23.7B (organic growth 8%–10%). EPS to $11.80–$12.00 (raised +$0.40 at both ends). FCF reaffirmed at ~$3B.

Missile Solutions is the strategic centerpiece (big opportunity; also where execution risk concentrates) - Management highlighted a major capacity + manufacturing turnaround since acquiring Aerojet ~3 years ago: deliveries up >60%, substantially all delinquent deliveries eliminated, manufacturing efficiency +22%. - Pentagon/War funding accelerant: $1B investment noted as enabling plan acceleration by 12–18 months. - Framework negotiation: company is actively negotiating $20B+ in additional missile-related contracts, described as potentially tripling backlog (surprisingly strong pipeline). - Expected missile segment growth: “high teens” growth over the next couple years (and longer visibility implied), as factories come online (timing is the key risk).

Concrete long-duration customer commitments: THAAD/PAC-3 framework + “revisit IPO” timeline (opportunity; markets valuation is the wildcard) - Post-quarter framework signing: 7 years of THAAD + PAC-3 production worth ~$12B future production revenue and $2B future profit (management also claims sole-source positions for key components). - PAC-3 capacity expansion: new automated PAC-3 facility expected late 2027 (capacity ramp timing risk). - Missile business IPO: expected to be revisited mid-2027 (pushed from earlier market expectations). - Rationale: management says market conditions undervalue the business; wants IPO later when more cash/backlog/profitability is visible. - Surprising/important: IPO delay is explicitly tied to valuation psychology and timing of cash realization (not technology/engineering).