L3Harris Technologies (NYSE: LHX) reported double-digit revenue growth in the fourth quarter and full-year 2023 and gave financial guidance for 2024, including revenue growth, free cash flow and dividend payout.
“We delivered on our 2023 financial commitments and reported record backlog of $33 billion,” Christopher Kubasik, chair and CEO of L3Harris, said in a statement published Thursday. “Our agility and innovation continue to resonate with customers, enabling us to broaden our capabilities into high-growth markets.”
In the quarter and fiscal year ending Dec. 29, 2023, revenue grew 17 percent and 14 percent to $5.3 billion and $19.4 billion versus Q4 and full year 2022. Net income for the year increased 12.9 percent to $1.19 billion. Company leadership attributed the full-year revenue growth to L3Harris’ acquisitions of Aerojet Rocketdyne and Tactical Data Links.
“Last year, we also closed, integrated, and are benefiting from two acquisitions and we announced the sale of a non-core business. These actions are strengthening and better aligning our portfolio with the Department of Defense and U.S. allied partner priorities,” added the three-time Wash100 awardee Kubasik.
L3 Harris presented a framework to investors in December, and Kubasik said it is consistent with the company’s 2024 guidance. Kenneth Bedingfield, senior vice president and chief financial officer, noted that the company ended 2023 with improved solid working capital from elevated levels during the pandemic.
Bedingfield expects revenue this year to be $21.3 billion, with organic growth in all segments, or 2.9 percent higher than the previous year. The projected free cash flow growth is 10 percent or approximately $2.2 billion. Still, L3Harris aims to grow free cash further over the next several years.
Regarding shareholder returns, L3Harris targets a 35 to 40 percent payout ratio and plans to accelerate share buybacks in 2025 and 2026. Another goal this year is achieving a $1 billion cost savings from the LHX NeXt program.
Kubasik said the positive momentum has carried over to early 2024, as evidenced by recent awards like the 18 satellites from the Space Development Agency valued at more than $900 million. According to him, L3Harris has turned in 200 proposals worth $13 billion, which the company has to win and negotiate the contracts.
