Christopher Kubasik, chair and CEO of L3Harris Technologies (NYSE: LHX), said the company plans to discontinue its merger and acquisition activity for the “foreseeable future” to strengthen its balance sheet and return all excess capital to shareholders.
At the company’s investor day on Tuesday, Kubasik stated that the Melbourne, Florida-based aerospace and defense contractor will focus on advancing operational improvements to improve productivity, achieve strong cash flow, pursue margin expansion and cut expenses.
“We look forward to building on this baseline and identifying opportunities for further margin and cash flow improvement by working with the Board’s newly formed Business Review Committee during its comprehensive evaluation of the Company’s performance and operations,” he added.
In July, L3Harris closed its purchase of Aerojet Rocketdyne, launching the acquired propulsion system maker as its fourth business segment.
The company’s capital deployment priorities between 2024 and 2026 include research and development investments and efforts to pay down debt to reach a leverage of 3.0x.
For its 2026 financial framework, L3Harris management expects the company to record $23 billion in revenue, achieve free cash flow of $2.8 billion and post a segment operating margin of 16 percent.
