L3Harris Technologies, Inc. (LHX) Q4 2022 Earnings Call Transcript

L3Harris Technologies, Inc. (NYSE:LHX) Q4 2022 Earnings Conference Call January 27, 2023 8:30 AM ET

Company Participants

Rajeev Lalwani - Vice President, Investor Relations

Chris Kubasik - Chief Executive Officer

Michelle Turner - Chief Financial Officer

Conference Call Participants

Doug Harned - Bernstein

Robert Stallard - Vertical Research

Sheila Kahyaoglu - Jefferies

Scott Deuschle - Credit Suisse

Michael Ciarmoli - Truist

Seth Seifman - JPMorgan

Gautam Khanna - Cowen & Company

Robert Spingarn - Melius Research

Kristine Liwag - Morgan Stanley

Peter Arment - Baird

Richard Safran - Seaport Research Partners

Operator

Greetings. Welcome to the L3Harris Technologies Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this call is being recorded.

It is now my pleasure to introduce your host, Rajeev Lalwani, Vice President, Investor Relations. Thank you, and you may now begin.

Rajeev Lalwani

Thank you, Rob. Good morning, and welcome to our fourth quarter 2022 earnings call. We published our investor letter after the market close yesterday. So today's call will primarily be focused on answering your questions.

Joining me for the call are Chris Kubasik, our CEO; and Michelle Turner, our CFO. A few words on forward-looking statements and non-GAAP measures.

Forward-looking statements involve risks, assumptions and uncertainties that could cause actual results to differ materially. For more information, please see our investor letter and SEC filings.

A reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the Investor Relations section of our website, which is l3harris.com, where a replay of this call will also be available.

Before going to questions, Chris will make some brief comments.

Chris Kubasik

Okay. Thank you, Rajeev, and good morning, everyone. As we reported yesterday, our fourth quarter came in ahead of expectations, and our 2023 guidance points to steady or improving trends. We've also been active on the M&A front, consistent with our strategy, as opportunities present themselves.

Let's start with Q4. The team delivered a solid top line, up 6% organically, with Communications leading the way as we saw improvements in electronic component availability within tactical comms. This contributed to the second consecutive quarter of organic growth for our company.

Segment margins were about what we expected, with ongoing pressures from macro factors, including inflated costs for material and labor. The net of this is EPS just above our recently guided midpoint and free cash flow at our $2 billion outlook.