L3Harris corporate headquarters in Melbourne, Florida. Photo: L3Harris

L3Harris Technologies on Thursday reported a substantial increase in net income in the fourth quarter driven in large part by a charge a year ago in a business that it is divesting and improved operating performance at most of the businesses.

The sale of the Commercial Aviation Solutions (CAS) business was expected to conclude last year but deal complexities have led to the company to include the business in its 2025 outlook. L3Harris expects the divesture this year.

Net income increased to $456 million, $2.37 earnings per share (EPS), from $126 million (83 cents EPS) a year ago.

Excluding the asset impairment charge a year ago related to CAS, and other non-recurring, restructuring, and merger expenses, adjusted per share earnings of $3.47 were 12 cents higher than a year ago and a nickel above consensus estimates. Adjusted segment operating margin was up 20 basis points to 15.3 percent.

L3Harris said its ongoing cost savings effort has beaten the target so far by $800 million, leading the company to increase the overall goal to $1.2 billion this year, $200 million above plan.

Sales in the quarter were up 3 percent to $5.5 billion from $5.3 billion a year ago. Excluding the divestiture of the company’s antenna business, organic revenue was up 4 percent.

Growth was driven by aircraft missionization, the Commercial Aviation Solutions (CAS) unit, communications equipment—including software defined tactical radios to NATO countries and other international markets—and rocket motors for missile programs.

Backlog rose to a record $34.2 billion, up $200 million from the third quarter.

For the year, sales increased 10 percent to $21.3 billion from $19.4 billion in 2023. Net income rose 26 percent to $1.5 billion versus $1.2 billion a year ago.

In 2025, sales are expected to grow to between $21.8 billion and $22.2 billion, led by the Integrated Mission Systems Segment, and followed by Aerojet Rocketdyne, Communications Systems, and Space and Airborne Systems.

Ken Bedingfield, L3Harris CFO said the flurry of executive orders announced by President Trump since his inauguration last Monday could soon impact bookings and revenue in the first quarter of 2025, particularly in the Communications Systems segment. This will depend on assessments by government contracting officers of the executive orders, he said.

Space and Airborne Results 

Fourth quarter revenue in the Space and Airborne segment (SAS) decreased 4% with the divestiture of the company’s antenna business in the second quarter. Excluding the divestiture impact, organic revenue decreased 1%, primarily due to lower F-35 related volume, partially offset by increased volume in  FAA safety of flight networks business and growth of classified programs in Intel & Cyber.

In 2024, revenue for SAS was flat, reflecting the divestiture of the antenna business. Excluding the divestiture impact, organic revenue increased 2% primarily due to program growth in Intel & Cyber and higher volume in the FAA safety of flight networks business, partially offset by lower F-35 related volume.

Bedingfield said that in 2025, SAS revenue is expected to grow to a range of $6.9 billion to $7.1 billion. He said budgetary constraints in the space sector are expected to abate in 2026.

Bedingfield told investors the company realized about $100 million of negative adjustments across classified space programs in 2024.

A version of this story was first published by Defense Daily