Key Highlights

  • Diluted EPS of USD 3.28 rose 33% year over year and beat the consensus estimate of USD 2.95.
  • Revenue of USD 6.06 billion grew 7% and exceeded the consensus estimate of USD 5.92 billion.
  • Orders of USD 19.3 billion gave a book to bill ratio of 3.2 and a USD 53.2 billion backlog.
  • Free Cash Flow of USD 1.3 billion rose nearly 200%; 2026 EPS guidance rose to USD 12.25 to 12.35.

L3Harris Technologies, Inc. (NYSE:LHX) reported third quarter 2026 GAAP Diluted Earnings per Share of USD 3.28, ahead of the consensus estimate of USD 2.95 and up from USD 2.46 a year earlier. Revenue of USD 6.06 billion was above the consensus estimate of USD 5.92 billion and rose from USD 5.66 billion, a 7% gain, or 9% on an organic basis despite one fewer week in the period. Net Income reached USD 632 million compared with USD 462 million.

Operating income increased 27% to USD 786 million, and Operating Margin widened 200 basis points to 13%. Chief Executive Officer Sam Mehta tied the result to execution and pointed to a Backlog aligned with missiles, space, resilient communications and electronic warfare, and multi-domain sensing.

Missile Awards Lift Backlog to USD 53.2 Billion

The company booked USD 19.3 billion of orders, and backlog climbed 27% to USD 53.2 billion, up 47% year over year. The two largest awards, PAC-3 and THAAD, totaled USD 11 billion. Mr. Mehta said PAC-3 solid rocket motor deliveries doubled from last year and the company plans to double them again in 2027 and triple THAAD solid rocket motor deliveries in 2027 versus 2026.

By segment, Space and Mission Systems revenue grew 10% to USD 3.1 billion at a 10.9% margin. Communications and Spectrum Dominance revenue rose 3% to USD 2.0 billion at a 25.2% margin, though the chief financial officer said Supply disruption on a small group of components held back growth. Missile Solutions revenue rose 5%, or 17% organically excluding the divested commercial space propulsion business, at a 12.0% margin. International revenue grew 18% and made up 24% of the total.

Raised Guidance and Capital Priorities

The chief financial officer said full year 2026 revenue guidance now stands at USD 23.5 billion to USD 23.7 billion, with organic growth of 9% to 10%, and EPS guidance rose to USD 12.25 to USD 12.35 from USD 11.80 to USD 12.00. About half of the USD 0.40 midpoint increase comes from lower interest expense, now projected at USD 515 million. Free cash flow guidance of USD 3 billion and the low 16% segment margin range were reaffirmed.

For 2028, management reaffirmed organic growth of 8% but cut the segment margin projection to approximately 16% from 16.3% and free cash flow to USD 3 billion from USD 3.5 billion, citing cash funding of company 401(k) contributions, lower margin and earlier missile capital spending. Operating Cash Flow was USD 1.4 billion and the company held USD 3 billion of cash and short term investments. Net Debt Leverage has fallen to about 1.9 times from 4.3 times, and a USD 3 billion missile capacity Investment ranks first among capital priorities.

Signposts for the Fourth Quarter

The fourth quarter brings several dated items. The company projects about USD 1 billion of free cash flow and a USD 800 million debt repayment, which would bring year end cash to USD 3.2 billion. Management also said stronger fourth quarter revenue growth follows the partial resolution of supplier issues in Communications and Spectrum Dominance.

Backlog conversion is another reference, since the company stated about 35% of the USD 53.2 billion converts to revenue over twelve months and 55% over twenty four months. The 2027 targets to double PAC-3 and triple THAAD motor deliveries add two more measurable items.