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L3Harris' fourth-quarter results top estimates on weapons demand

Published 01/25/2024, 05:07 PM
Updated 01/25/2024, 05:11 PM
© Reuters. The logo and ticker for L3Harris are displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 1, 2019. REUTERS/Brendan McDermid/File Photo

(Reuters) - L3Harris beat estimates for fourth-quarter profit on Thursday, benefiting from higher weapons demand and increased global defense spending amid escalating security concerns.

U.S. defense companies are experiencing a surge in contracts on account of the Russia-Ukraine war, the Middle East crisis and the specter of Chinese aggression, but growth is capped by persisting labor and supply chain disruptions.

L3Harris expects its 2024 sales to be between $20.7 billion and $21.3 billion, below LSEG estimates of $21.45 billion, sending its shares down about 3% in extended trading.

Peers Lockheed Martin (NYSE:LMT) also forecast its 2024 profit below analysts estimates this week, while Northrop Grumman (NYSE:NOC) posted a fourth-quarter loss.

L3Harris had said last month it would suspend its merger and acquisition activity for the "foreseeable future", in its efforts to strengthen balance sheet.

The company, formed by the merger of L3 Technologies and Harris Corp (NYSE:LHX) in 2019, counts the Pentagon, planemaker Boeing (NYSE:BA) and defense and aerospace major RTX among its customers.

© Reuters. The logo and ticker for L3Harris are displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 1, 2019. REUTERS/Brendan McDermid/File Photo

On an adjusted basis, the defense contractor earned $3.35 per share, compared with analysts' estimate of $3.31 per share.

Its overall sales rose 17% during the quarter ended Dec. 29 to $5.34 billion, versus analysts' expectations of $5.29 billion.

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