L3Harris Technologies, Inc. stock research
FY2024 Q1
L3Harris Technologies (LHX) Gross Margin — Quarter Ended Mar 29, 2024
Revenue decreased from the preceding quarter but increased from the same quarter last year, while gross profit followed a similar pattern. Cost of revenue remained stable quarter-over-quarter, leading to a lower gross margin compared to both periods.
Gross margin takeaway
Quarter ended Mar 29, 2024 · FY2024 Q1
Revenue decreased from the preceding quarter but increased from the same quarter last year, while gross profit followed a similar pattern. Cost of revenue remained stable quarter-over-quarter, leading to a lower gross margin compared to both periods.
- The primary driver of margin change was the stability of cost of revenue in the sequential comparison, which did not decrease alongside the decline in revenue, thereby compressing gross margin. Year-over-year, cost of revenue grew at a faster pace relative to revenue, resulting in a slightly weaker margin.
- Compared to the preceding quarter, gross margin weakened as revenue decreased while cost of revenue held steady. Relative to the same quarter last year, gross margin was also lower, driven by a larger increase in cost of revenue relative to revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
25.9%
Gross profit
$1.3B
Revenue
$5.2B
Cost of revenue
$3.9B
Quarter-over-quarter change
-1.3 pts
Year-over-year change
-0.2 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 |
|---|---|---|---|---|
| Jun 30, 2023 | $4.7B | $1.2B | $3.5B | 25.3% |
| Sep 29, 2023 | $4.9B | $1.3B | $3.6B | 26.6% |
| Dec 29, 2023 | $5.3B | $1.5B | $3.9B | 27.2% |
| Mar 29, 2024 | $5.2B | $1.3B | $3.9B | 25.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 29, 2023
-1.3 pts
Year-over-year change
Mar 31, 2023
-0.2 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary driver of margin change was the stability of cost of revenue in the sequential comparison, which did not decrease alongside the decline in revenue, thereby compressing gross margin. Year-over-year, cost of revenue grew at a faster pace relative to revenue, resulting in a slightly weaker margin.
Compared to the preceding quarter, gross margin weakened as revenue decreased while cost of revenue held steady. Relative to the same quarter last year, gross margin was also lower, driven by a larger increase in cost of revenue relative to revenue.
Monitor whether cost of revenue begins to adjust to changes in revenue, as its recent stability in the face of a revenue decline directly pressured margins.