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L3Harris Posts Strong Q2 2026, Raises 2026 Guidance, Delays Missile Solutions IPO
L3Harris Technologies (NYSE: LHX) announced its second‑quarter 2026 results on July 29, reporting revenue of $5.9 billion, an 8% year‑over‑year increase, and diluted earnings per share of $3.13, a 28% rise from the same period a year earlier. Operating margin expanded to 11.1%, up 60 basis points, and the company’s free‑cash‑flow grew 37% from the prior year.
The company’s order book for the quarter was $7.3 billion, giving a book‑to‑bill ratio of 1.2×. The backlog climbed to a record $42 billion, driven by higher demand for missile‑warning and tracking systems, mission‑ized aircraft equipment, FAA modernization contracts, and smart‑radio solutions. International orders now account for 23% of the company’s revenue mix, a rise that reflects growing overseas demand.
L3Harris raised its fiscal‑year 2026 guidance on the earnings call. Revenue is now expected to be between $23.2 billion and $23.7 billion, and diluted earnings per share are projected at $11.80 to $12.00, above consensus estimates of $11.67. The company cited a strong backlog and accelerating missile‑sales momentum as the basis for the upward revision.
A key focus of the call was the company’s Missile Solutions unit, created after L3Harris acquired Aerojet Rocketdyne in July 2023. The unit is responsible for solid‑rocket motor production and other missile‑related systems. L3Harris had planned an initial public offering of the unit in the second half of 2026, but it announced a postponement to mid‑2027. Management said the decision was driven by a perception that the market undervalues the business and by recent volatility in the IPO market.
The company’s backlog includes a $12 billion THAAD/PAC‑3 deal, underscoring continued demand for advanced missile‑defense systems. L3Harris also highlighted growth in its Mission‑ized Aircraft segment, which is expected to see high‑teens growth in the coming years.
Insider activity was noted during the quarter. According to a report, insiders sold $43.38 million of L3Harris stock in 2025, including $29 million in discounted stock options exercised by the CEO. Despite the sales, insiders retain a 1% stake in the company.
L3Harris was formed in 2019 from the merger of L3 Technologies and Harris Corporation, making it the sixth‑largest defense contractor in the United States. The company’s product portfolio spans command and control systems, tactical radios, avionics, night‑vision equipment, and a range of C3ISR solutions.
The company’s latest results reinforce its position as a key supplier to the U.S. Department of Defense and allied governments. The record backlog and improved margins suggest continued resilience amid a competitive defense market. The postponed IPO of the Missile Solutions unit remains the only significant uncertainty, as does the company’s ability to sustain the higher guidance in the face of potential budgetary constraints.
In summary, L3Harris delivered a solid Q2 2026 performance, raised its 2026 outlook, and extended its backlog to a record $42 billion. The company’s decision to delay the Missile Solutions IPO to mid‑2027 reflects market conditions and valuation concerns. Investors will watch how the company navigates the upcoming earnings cycle and whether it can maintain the upward trajectory in revenue and earnings guidance.
The company’s order book for the quarter was $7.3 billion, giving a book‑to‑bill ratio of 1.2×. The backlog climbed to a record $42 billion, driven by higher demand for missile‑warning and tracking systems, mission‑ized aircraft equipment, FAA modernization contracts, and smart‑radio solutions. International orders now account for 23% of the company’s revenue mix, a rise that reflects growing overseas demand.
L3Harris raised its fiscal‑year 2026 guidance on the earnings call. Revenue is now expected to be between $23.2 billion and $23.7 billion, and diluted earnings per share are projected at $11.80 to $12.00, above consensus estimates of $11.67. The company cited a strong backlog and accelerating missile‑sales momentum as the basis for the upward revision.
A key focus of the call was the company’s Missile Solutions unit, created after L3Harris acquired Aerojet Rocketdyne in July 2023. The unit is responsible for solid‑rocket motor production and other missile‑related systems. L3Harris had planned an initial public offering of the unit in the second half of 2026, but it announced a postponement to mid‑2027. Management said the decision was driven by a perception that the market undervalues the business and by recent volatility in the IPO market.
The company’s backlog includes a $12 billion THAAD/PAC‑3 deal, underscoring continued demand for advanced missile‑defense systems. L3Harris also highlighted growth in its Mission‑ized Aircraft segment, which is expected to see high‑teens growth in the coming years.
Insider activity was noted during the quarter. According to a report, insiders sold $43.38 million of L3Harris stock in 2025, including $29 million in discounted stock options exercised by the CEO. Despite the sales, insiders retain a 1% stake in the company.
L3Harris was formed in 2019 from the merger of L3 Technologies and Harris Corporation, making it the sixth‑largest defense contractor in the United States. The company’s product portfolio spans command and control systems, tactical radios, avionics, night‑vision equipment, and a range of C3ISR solutions.
The company’s latest results reinforce its position as a key supplier to the U.S. Department of Defense and allied governments. The record backlog and improved margins suggest continued resilience amid a competitive defense market. The postponed IPO of the Missile Solutions unit remains the only significant uncertainty, as does the company’s ability to sustain the higher guidance in the face of potential budgetary constraints.
In summary, L3Harris delivered a solid Q2 2026 performance, raised its 2026 outlook, and extended its backlog to a record $42 billion. The company’s decision to delay the Missile Solutions IPO to mid‑2027 reflects market conditions and valuation concerns. Investors will watch how the company navigates the upcoming earnings cycle and whether it can maintain the upward trajectory in revenue and earnings guidance.
