L3Harris Technologies (NYSE: LHX) declared its regular quarterly cash dividend on Oct. 23, 2026, according to its release, keeping the payout going just ahead of its Oct. 29 earnings report. Q2 free cash flow of $771.0M covered the $232.0M dividend, after a negative first quarter. For readers following the "defense tech" theme, the company's release calls L3Harris the "Trusted Disruptor in defense tech," and the dividend shows how a large defense contractor handles shareholder returns around that positioning.
Key facts
- Oct. 23, 2026: The board declared a quarterly cash dividend, payable in December to holders of record in early December, according to the company's release. The shares traded at $253.97 on the latest quote, down 0.10%.
- Q2 FY2026 (ended July 3, 2026): Revenue was $5.88B, up 8.4% from the year-ago quarter. Diluted EPS was $3.13, against an analyst estimate of $2.80.
- Q2 FY2026 cash flow: Operating cash flow was $879.0M and free cash flow was $771.0M. Dividends paid were $232.0M and buybacks were $229.0M.
- Oct. 29, 2026: The next earnings report is due. Analysts expect EPS of $2.95 and revenue of $5.92B.
- Valuation (trailing 12 months): P/E is 25.50 and the dividend yield is 1.9%.
What happened
The theme. As general background, not something from the company's release, "defense tech" is commonly used to describe a shift in military spending toward space-based sensors, secure communications, electronic warfare, missiles and software. L3Harris describes itself in its release as the "Trusted Disruptor in defense tech." For investors, the question is whether the company can grow in these areas while still paying out cash.
The company's latest step. On Oct. 23, 2026 L3Harris said its board had declared the regular quarterly dividend. The release described no change to the policy, and it contained no new guidance. The news is routine, but it comes at a useful moment: the company reports again next week.
The most recent results. In the second quarter ended July 3, 2026, L3Harris reported revenue of $5.88B, ahead of the analyst estimate of $5.81B. EPS (earnings per share, profit divided by share count) of $3.13 beat the $2.80 estimate. Net income of $600.0M was up 31.0% from the year-ago quarter, a faster rate than revenue growth of 8.4%.
Segments. FMP data uses different segment labels for the two periods, so older and newer figures are not like-for-like. For the first quarter ended April 3, 2026, FMP data shows Space and Airborne Systems revenue of $2.99B, Communication Systems revenue of $1.85B and Integrated Mission Systems revenue of $990.0M. For the second quarter, the data, listed under FMP's revenue-by-geography field, shows Communications & Spectrum Dominance at $819.0M, Space & Mission Systems at $439.0M and Missile Solutions at $120.0M. These three lines may not cover the whole company, so treat them as a partial view. No earnings-call transcript was available to us, so we cannot quote management on what drove the quarter.
Five-quarter trend.
| Quarter (ended) | Revenue | Gross margin | Operating margin | Net income | Free cash flow | |---|---|---|---|---|---| | Q2 FY2025 (June 27, 2025) | $5.43B | 24.6% | 10.8% | $458.0M | $552.0M | | Q3 FY2025 (Oct. 3, 2025) | $5.66B | 26.4% | 11.2% | $462.0M | $427.0M | | Q4 FY2025 (Jan. 2, 2026) | $5.65B | 25.6% | 6.7% | $300.0M | $1.80B | | Q1 FY2026 (Apr. 3, 2026) | $5.74B | 24.4% | 11.2% | $512.0M | -$194.0M | | Q2 FY2026 (July 3, 2026) | $5.88B | 25.5% | 11.1% | $600.0M | $771.0M |
Two things stand out. Revenue rose through the period, and operating margin (operating profit as a share of sales) held near 11% in four of the five quarters. The exception was the quarter ended Jan. 2, 2026, when it dropped to 6.7%. Cash flow was uneven. Free cash flow (cash from operations minus capital spending) was negative in the first quarter of fiscal 2026, then rebounded in the second. Defense contractors often see cash arrive in lumps, tied to when customers pay, so a single quarter says little on its own.
Why it matters for investors
Dividend coverage. In the second quarter, free cash flow of $771.0M was larger than either the $232.0M paid in dividends or the $229.0M spent on buybacks. In the first quarter, free cash flow was negative while the company still paid $238.0M in dividends and spent $296.0M on buybacks. Across the two quarters combined, free cash flow was $577.0M against $995.0M of dividends plus buybacks. Over two quarters the picture is mixed.
Balance sheet. At July 3, 2026 L3Harris held $1.52B in cash and short-term investments against $11.00B of total debt, leaving net debt of $9.48B. Shareholders' equity was $20.85B and debt/equity is 0.53. The Piotroski score, a 0-to-9 measure of financial health, is 9, the top mark. The Altman Z score, a bankruptcy-risk gauge, is 2.23.
Valuation versus peers.
| Company | P/E | Net margin | |---|---|---| | L3Harris (LHX) | 25.50 | 8.2% | | General Dynamics (GD) | 21.01 | 8.2% | | BAE Systems (BAESY) | 27.60 | 7.2% | | Leonardo DRS (DRS) | 28.76 | 8.5% | | Hensoldt (HAGHY) | 80.84 | 4.5% |
L3Harris sits at the lower end of this group on P/E, behind only General Dynamics, and matches General Dynamics on net margin. Hensoldt's P/E is far higher, but its net margin is the lowest of the group.
Analysts. Of 34 ratings, 25 are Buy, 7 are Hold and 2 are Sell, and the consensus is "Buy." The average analyst price target is $340.00, with a range of $315.00 to $365.00. Those figures are analysts' views, not ours. The shares at $253.97 trade below that range and within a 52-week range of $232.34 to $379.23. FMP's own discounted-cash-flow model, a rough estimate of what future cash is worth today, gives $272.52 per share. Recent rating actions in October were all maintained ratings, including Bernstein at Outperform, Goldman Sachs at Buy and RBC Capital at Sector Perform. Among the 30 most recent insider filings (Form 4), none dated in the last 90 days showed open-market purchases or sales, though older filings in the window may be missing.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 for LHX is 62.6, rated "Fair." Relative to its sector, growth scores 66 and safety 63, the two strongest pillars. Quality and valuation each score 57. Momentum is the weakest at 44, which fits a share price well below its 52-week high.
What could go wrong.
- The cash flow swing between quarters means one strong quarter does not settle the question.
- Net debt of $9.48B limits flexibility if profits or cash flow slip.
- The 6.7% operating margin in the quarter ended Jan. 2, 2026 shows that margins can fall sharply.
- The consensus EPS estimate for the coming report ($2.95) is lower than the $3.13 just reported, so the bar is not rising.
- The stock's weak momentum score shows the market has not rewarded the company recently.
What to watch next
- Oct. 29, 2026 earnings: Compare results with the estimates of $2.95 EPS and $5.92B revenue, and watch whether free cash flow stays positive after the second-quarter rebound.
- Margins: Operating margin has been near 11% in four of five quarters. See whether it holds.
- Buybacks versus debt: Watch how management balances share repurchases, dividends and the $11.00B debt load.
- Segment detail: With segment labels differing between periods, look for management's explanation of growth in communications, space and missile work.
- Further out: Analysts expect EPS of $3.45 for the period ending April 3, 2028 and $3.67 for the period ending July 3, 2028. Only three analysts contribute to each figure, so treat them as rough.
Frequently asked questions
Q: Did L3Harris raise its dividend in October 2026?
The company's Oct. 23, 2026 release announced a regular quarterly cash dividend, payable in December. It did not describe the payout as an increase. The trailing dividend yield is 1.9%.Q: Is the L3Harris dividend covered by cash flow?
In the second quarter ended July 3, 2026, free cash flow of $771.0M was larger than the $232.0M of dividends paid. In the first quarter ended April 3, 2026, free cash flow was negative $194.0M, so coverage varies by quarter. Looking at several quarters gives a fairer picture than any single one.Q: When does L3Harris report earnings next, and what do analysts expect?
The next report is due Oct. 29, 2026. Analysts expect EPS of $2.95 and revenue of $5.92B. In the previous report, for the quarter ended July 3, 2026, the company beat both the EPS and revenue estimates.This is educational content, not investment advice. Past performance does not guarantee future results.