L3Harris Technologies, Inc. stock research
FY2023 Q3
L3Harris Technologies (LHX) Gross Margin — Quarter Ended Sep 29, 2023
Revenue and cost of revenue both increased, with gross profit rising at a faster rate than cost of revenue compared to the prior quarter, leading to an improved gross margin. However, relative to the same quarter last year, gross margin weakened as cost of revenue grew more than revenue.
Gross margin takeaway
Quarter ended Sep 29, 2023 · FY2023 Q3
Revenue and cost of revenue both increased, with gross profit rising at a faster rate than cost of revenue compared to the prior quarter, leading to an improved gross margin. However, relative to the same quarter last year, gross margin weakened as cost of revenue grew more than revenue.
- The strongest observable margin driver is the sequential improvement in gross margin from the prior quarter, reflecting a more favorable relationship between revenue and cost of revenue. A concrete item to monitor is the business realignment noted in the filing, which may affect segment reporting but has no impact on consolidated results.
- Compared to the immediately preceding quarter, gross margin improved as revenue and gross profit increased while cost of revenue rose at a slower pace. Compared to the same quarter one year earlier, gross margin weakened because cost of revenue grew more than revenue, despite higher absolute gross profit.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
26.6%
Gross profit
$1.3B
Revenue
$4.9B
Cost of revenue
$3.6B
Quarter-over-quarter change
+1.3 pts
Year-over-year change
-1.5 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $4.5B | $1.2B | $3.3B | 26.1% |
| Jun 30, 2023 | $4.7B | $1.2B | $3.5B | 25.3% |
| Sep 29, 2023 | $4.9B | $1.3B | $3.6B | 26.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
+1.3 pts
Year-over-year change
Sep 30, 2022
-1.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the sequential improvement in gross margin from the prior quarter, reflecting a more favorable relationship between revenue and cost of revenue. A concrete item to monitor is the business realignment noted in the filing, which may affect segment reporting but has no impact on consolidated results.
Compared to the immediately preceding quarter, gross margin improved as revenue and gross profit increased while cost of revenue rose at a slower pace. Compared to the same quarter one year earlier, gross margin weakened because cost of revenue grew more than revenue, despite higher absolute gross profit.
Monitor the impact of the business realignment on segment-level margins, as the filing indicates a structural change in reporting segments effective fiscal 2023.