Abstract
L3Harris Technologies, Inc. will report fiscal second-quarter 2026 results on July 29, 2026 Post-Mkt; investors are looking for sustained revenue growth, margin steadiness, and updates on the planned missile business IPO alongside contract execution milestones.
Market Forecast
Consensus points to fiscal Q2 2026 revenue of 5.81 billion US dollars, up 9.14% year over year, adjusted EPS of 2.80, up 12.37% year over year, and EBIT of 0.87 billion US dollars, up 12.04% year over year. The company did not issue quarterly gross margin or net margin guidance in its last update, and market models therefore concentrate on top-line growth and operating profit leverage into EPS.
The main business is anchored by Space and Mission Systems, where recent awards support visibility into the second half; management’s operational focus remains on on-time delivery and program progress to translate backlog to sales. The most promising segment is Missile Solutions, which generated 0.99 billion US dollars last quarter with year-over-year growth of 18%, supported by fresh awards and capacity expansion already announced for delivery programs.
Last Quarter Review
In fiscal Q1 2026, L3Harris Technologies, Inc. delivered revenue of 5.74 billion US dollars, a gross profit margin of 24.41%, GAAP net profit attributable to the parent company of 512.00 million US dollars, a net profit margin of 8.91%, and adjusted EPS of 2.72, up 12.86% year over year.
A key highlight was the beat versus consensus on both revenue and EPS and a raise to the full-year 2026 adjusted EPS outlook to 11.40–11.60 on April 30, 2026, while GAAP net profit improved sharply quarter on quarter by 70.67%.
By business, Space and Mission Systems posted 2.99 billion US dollars, Communication and Spectrum Dominance delivered 1.86 billion US dollars, and Missile Solutions reached 0.99 billion US dollars; within these, Missile Solutions stood out with 18% year-over-year growth.
Current Quarter Outlook
Space and Mission Systems
L3Harris Technologies, Inc.’s Space and Mission Systems unit enters fiscal Q2 with tangible revenue catalysts from newly secured awards and ongoing execution milestones. On July 14, 2026, the company disclosed a contract from the US Space Force’s Space Development Agency to develop 18 accelerated missile defense satellites in Tranche 3 under the Golden Dome effort, with production to begin immediately. Revenue conversion from these satellites typically follows hardware and payload manufacturing progress and delivery schedules; while much of the value skews to future quarters, Q2 can benefit from early design, long-lead procurement, and initial production tasks that are recognized under percentage-of-completion accounting.
Execution underpins the earnings narrative. The recent on-orbit demonstration of the Hypersonic and Ballistic Tracking Space Sensor satellite, plus delivery of an infrared sensor payload for the Missile Defense Agency, provides strong technical validation that can accelerate program momentum. Investors should expect management to comment on the phasing of revenue and margin for these satellite programs, including how fixed-price versus cost-plus mix and milestone gates will map to the second half of fiscal 2026.
Profitability dynamics hinge on supply chain and mix. The segment’s scale last quarter (2.99 billion US dollars) provides operating leverage, and the company’s fixed-cost absorption benefits from sustained high throughput. Still, the quarter’s gross margin will likely be driven by the mix of early-phase, lower-margin development work versus later-phase, higher-margin integration and delivery. Management’s color on where programs sit on their cost curves, and whether there are any cost captures or learning-curve benefits in Q2, will be key to interpreting the EBIT forecast of 0.87 billion US dollars for the consolidated company.
Missile Solutions
Missile Solutions is positioned as the quarter’s largest growth engine after delivering 0.99 billion US dollars last quarter with an 18% year-over-year increase. On June 25, 2026, the company broke ground on two facilities at its Arkansas Advanced Propulsion Facilities campus in Camden to support increased production capacity for PAC-3 propulsion systems, a move that reinforces demand visibility and manufacturing readiness. A new Flight Test Airborne Sensors award from the Missile Defense Agency announced on July 7, 2026 carries a maximum value of about 499.60 million US dollars; while the initial task order is modest at about 22.20 million US dollars, the multi-year ordering period structure typically supports a steady cadence of work that can sustain revenue beyond the immediate quarter.
Program traction is evident across sensor, propulsion, and integration roles, and the unit’s near-term catalysis extends to corporate actions. The company has been progressing plans for an IPO of its missile business (Axyv), with reports on June 17, 2026 indicating the selection of lead banks and potential proceeds up to 2.00 billion US dollars. While the IPO primarily affects valuation and portfolio strategy, the readiness for a stand-alone listing tends to imply cleaner segment reporting, sharper capital allocation, and a focus on profitability metrics that investors can track as quarterly updates unfold.
For the quarter at hand, watch the balance between capacity expansion costs and volume leverage. The Arkansas expansion supports medium-term throughput and could temporarily weigh on segment-level margins if ramp costs are expensed as incurred, though higher utilization as orders convert can offset this effect. Given the strong bookings environment evidenced by recent awards, the segment’s contribution to consolidated revenue growth and EBIT outperformance remains a central pillar of the 12.04% expected year-over-year EBIT growth for the company in Q2.
Communication and Spectrum Dominance
Communication and Spectrum Dominance delivered 1.86 billion US dollars last quarter and remains a fundamental contributor to consolidated cash generation and margin stability. Recent partnership announcements, such as the May 19, 2026 collaboration to integrate AI-driven sensing and response capabilities into radios that can detect and respond to drones, align with customer requirements for more autonomous, software-defined, and upgradeable systems. These developments generally support recurring software and services layers over hardware platforms, which can smooth revenue and margin over time.
The near-term focus is on shipment timing and mix. This unit’s revenue can fluctuate quarter to quarter based on delivery slots for large programs and the proportion of international versus domestic orders, potentially influencing gross margin. In the context of the consolidated Q2 consensus, even modest upside in this segment’s revenue or cost execution can have an outsized impact on consolidated EPS given the unit’s contribution to operating leverage.
Investors should also look for commentary on cross-segment integration with Space and Mission Systems and Missile Solutions, especially where communication payloads, spectrum management, or secure networking are embedded into satellite missile defense architectures. Such integration not only deepens customer lock-in but can produce higher-value systems that support pricing power and margin resilience when recognized in the quarter.
Key Stock Price Drivers This Quarter
Earnings quality and margin trajectory will likely be the main share-price drivers on July 29, 2026. Last quarter’s gross margin of 24.41% set a solid baseline; the market will parse whether Q2 shows stability or incremental improvement as high-value programs scale and production efficiencies continue, recognizing that mix (development versus production) can sway quarterly margin prints. With consensus modeling 12.37% year-over-year EPS growth to 2.80, any variance in cost performance or mix could swing EPS beyond the headline revenue outcome.
Order momentum and program updates will be closely watched. The recent Space Force satellite award and Missile Defense Agency activities indicate a healthy pipeline; investors will focus on any new awards announced around the print, the status of program milestones, and commentary on the pace of backlog conversion into revenue through the back half of the year. Unit awards for counter-drone systems disclosed on June 11, 2026—valued at up to 106.00 million US dollars—add to this backdrop of execution milestones that can influence management’s tone on the full-year guide.
Capital markets and portfolio updates may add another layer to the equity story. Progress toward the Axyv missile business IPO could influence how investors value trajectory and growth duration, and any details on proceeds usage, capital returns, or balance sheet priorities can affect the multiple the stock commands. Finally, guidance commentary—recapping the April 30, 2026 raise to the adjusted EPS outlook and any changes to the full-year revenue view—can act as a catalyst if management calls the year conservatively or shows incremental confidence supported by recent awards and capacity moves.
Analyst Opinions
Across the January 1, 2026 to July 22, 2026 window, the balance of published views skews decisively positive: roughly 78% of opinions are bullish (Buy/Overweight), with the remainder neutral and no clear bearish calls in the sample. The bullish camp emphasizes a favorable setup for earnings growth this quarter, citing solid program execution, rising contributions from missile-related work, and strengthening visibility from recent contract wins.
Prominent investment banks and research houses have reiterated constructive stances in recent months along with elevated price targets: Bernstein has maintained Buy with price targets around 398.00–405.00 US dollars and underscored the company’s strengthening program pipeline. Goldman Sachs, through analyst Noah Poponak, has kept a Buy and a 405.00 US dollars target, pointing to the consistency of delivery schedules and the earnings compounding potential as higher-margin work stages advance. Bank of America’s Ronald Epstein has reiterated Buy with a 400.00 US dollars target, with the case centered on margin recovery and scale benefits as high-throughput facilities come online and production learning curves mature.
Susquehanna has reiterated Buy with a 410.00 US dollars target, highlighting the earnings power and cash-generation profile as a function of program mix and backlog conversion. Argus Research has reaffirmed Buy at a 425.00 US dollars target, reflecting confidence that upcoming quarters can support continuing EPS acceleration and that the planned missile unit IPO could sharpen strategic focus and improve capital deployment. Taken together, the majority view anticipates that fiscal Q2 will reinforce a trend of double-digit EPS growth and position management to speak positively about the second half.
From a modeling perspective, the bullish base case aligns with consensus: revenue near 5.81 billion US dollars, EBIT near 0.87 billion US dollars, and adjusted EPS around 2.80, all with double-digit year-over-year growth rates. Analysts in this cohort expect the company to show disciplined execution on cost and delivery while using recent missile and space awards as proof points for continued growth. They also expect program and portfolio disclosures—such as progress on the Axyv IPO—to frame a cleaner, more investor-friendly narrative around segment performance, optionality, and valuation.
The majority argument emphasizes three themes for the print. First, backlog-to-sales conversion is accelerating in Space and Mission Systems as new awards ramp, supporting midyear revenue growth without heightened execution risk signals. Second, Missile Solutions is building durable momentum from fresh awards and manufacturing expansion, where even modest upside in throughput can translate to EBIT outperformance given the unit’s scale and learning-curve benefits. Third, the consolidated margin story is improving as higher-value integrated systems represent a greater portion of deliveries, allowing for incremental EPS upside versus consensus even if revenue lands close to the 5.81 billion US dollars expectation.
In short, the prevailing institutional stance remains optimistic that L3Harris Technologies, Inc. can deliver a solid fiscal Q2 print with 9.14% revenue growth and 12.37% EPS growth, supported by tangible contract wins, capacity initiatives already in motion, and program execution that continues to translate into operating leverage. The bullish cohort expects management’s tone on July 29, 2026 to reflect increasing confidence in the second half, with the potential for guidance commentary to set a constructive path for the remainder of fiscal 2026.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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