L3Harris lifts 2026 outlook on record backlog

Ground-based radar array on a test range symbolizing strong defense orders and backlog for LHX

Key Points

01L3Harris (LHX) raised 2026 revenue guidance to $23.5–$23.7 billion
02Full-year GAAP EPS outlook increased to a range of $12.25–$12.35
03Q3 revenue of $6.1 billion and EPS of $3.28 topped estimates
04Record $53.2 billion backlog driven by $19.3 billion in quarterly orders

Guidance raised after strong Q3 performance

L3Harris Technologies (LHX) increased its full-year 2026 financial guidance after posting strong third-quarter results and securing a record backlog. Management now expects revenue of $23.5 billion to $23.7 billion and GAAP earnings per share of $12.25 to $12.35 for the year. The company also reaffirmed its full-year free cash flow target of $3 billion.

The updated outlook places L3Harris’ revenue and EPS expectations above analyst consensus figures. The EPS guidance range of $12.25 to $12.35 compares with an analyst consensus of $11.90, while the revenue range of $23.5 billion to $23.7 billion stands above a listed consensus figure. The guidance revision follows broad-based growth across key business segments and improved profitability metrics in the quarter.

Record backlog and robust order intake

Third-quarter 2026 orders totaled $19.3 billion, driving L3Harris’ backlog to a record $53.2 billion. This order activity resulted in a book-to-bill ratio of 3.2x for the quarter, reflecting demand well above reported revenue. By segment, book-to-bill was 1.0x for Space & Mission Systems, 1.9x for Communications & Spectrum Dominance, and 11.8x for Missile Solutions.

Management highlighted plans to invest in production capacity and differentiated capabilities across missiles and missile solutions, space, resilient communications and multi-domain sensing. These areas are expected to support the conversion of the record backlog into revenue and earnings while serving key customer needs.

Q3 results beat expectations

For the third quarter of 2026, L3Harris reported revenue of $6.1 billion, an increase of 7% year over year and 9% on an organic basis. Diluted EPS was $3.28, up 33% compared with the prior year period and above an analyst EPS estimate of $2.95. Revenue also exceeded an analyst forecast of $5,918.66 million.

Operating income margin reached 13.0%, an improvement of 200 basis points from the prior year, supported by higher revenues and disciplined expense management. Segment operating margin was 15.9%. InvestingPro classifies L3Harris’ Financial Health score as "good performance".

Cash flow and balance sheet position

Operating cash flow in the third quarter totaled $1.4 billion, while free cash flow was $1.3 billion, up 195% from the prior year. Capital expenditures in the period were $179 million. L3Harris ended the quarter with $11.0 billion in total debt, $2.5 billion in cash and equivalents and $550 million in short-term investments, providing liquidity to fund operations and planned investments.

The combination of strong cash generation, a record backlog and raised full-year guidance underscores management’s confidence in the company’s trajectory for the remainder of 2026. The financial and operational metrics from the quarter form the basis for the updated outlook.

Key Takeaways

01L3Harris (LHX)’ raised revenue and EPS guidance follows a quarter where both top and bottom lines exceeded analyst expectations.
02A record $53.2 billion backlog and a 3.2x book-to-bill ratio highlight sustained demand across the company’s core defense and space markets.
03Improved margins and a sharp increase in free cash flow reinforce the company’s ability to fund investment in growth areas while supporting its full-year cash generation target.

References