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L3Harris to suspend M&A program for 'foreseeable future'

Published 12/12/2023, 03:14 PM
Updated 12/13/2023, 05:08 AM
© Reuters. FILE PHOTO: 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

(Reuters) - U.S. defense contractor L3Harris said on Tuesday it would suspend its merger and acquisition activity for the "foreseeable future" to strengthen balance sheet and forecast full-year revenue above analysts' estimates.

The company said it expects revenue at around $21 billion for 2024. Analysts on average were expecting about $19 billion, according to LSEG data.

The company also outlined its capital deployment priorities for two years from 2024 which include investments in research and development and debt payment, and utilize excess cash for dividend increases and share buybacks.

The company in its most recent quarter had total liabilities of $23.58 billion, as per LSEG data.

Two weeks ago, L3Harris divested its commercial aviation solution business for $800 million. The company said on Tuesday it will use the proceeds from the transaction to repay debt.

© Reuters. FILE PHOTO: 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

On Monday, L3Harris' board appointed an ad-hoc committee to review the company's operational performance, cost structure, and portfolio composition. It also named ex-Cooper Industries CEO Kirk Hachigian and former RTX Corp chief William Swanson to the board.

Earlier this year, L3Harris in a highly contested deal acquired rocket engine maker Aerojet Rocketdyne for $4.7 billion to tap into rising demand for missiles and defense systems.

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