Can L3Harris' FAA Air Traffic Modernization Support Growth?
L3Harris Technologies, Inc. LHX is positioned to benefit from increased spending on air traffic control modernization through its Mission Networks business. The company provides communications and networking solutions for air traffic management, making this area an important part of its Space & Airborne Systems segment. The opportunity is gaining relevance as federal funding is directed toward upgrading the nation’s air traffic infrastructure.
L3Harris’ Mission Networks business recorded higher revenues in 2025, with the increase primarily driven by higher Federal Aviation Administration (“FAA”) volume. The company reported a $375 million surge in Mission Networks revenues, which helped offset lower revenues in other areas of the Space & Airborne Systems segment. This growth highlights the contribution of FAA-related activity to the segment’s performance.
Federal funding also provides a potential avenue for further activity. The 2026 reconciliation package included $12.5 billion for the FAA for air traffic control modernization efforts. Increased funding for modernization could create additional opportunities for companies providing communications and networking capabilities used in air traffic management. L3Harris’ existing Mission Networks capabilities provide exposure to this spending area.
The opportunity could also support the company’s broader backlog and growth profile. Space & Airborne Systems ended 2025 with $11.38 billion of contractual backlog, while Mission Networks benefited from higher FAA volume during the year. As air traffic infrastructure is modernized, continued program activity could provide additional revenue opportunities for L3Harris while supporting its position in mission-critical communications and networking.
Companies Advancing Air Traffic Management Modernization
The modernization of air traffic management systems is creating opportunities for companies developing technologies that improve airspace coordination, surveillance and airport operations. RTX Corporation RTX and Honeywell International Inc. HON are developing technologies that support modern air traffic management systems.
RTX provides air traffic management solutions across surveillance, automation, communications and navigation. Its Collins Aerospace business develops systems to modernize aging infrastructure and manage increasingly complex airspace.
Honeywell develops air traffic and airport technologies focused on digitization and automation. Its NAVITAS suite integrates air traffic services, airport operations and information management to improve situational awareness and efficiency.
Earnings Estimates for LHX
The Zacks Consensus Estimate for 2026 and 2027 earnings per share suggests year-over-year growth of 9.60% and 14.87%, respectively.
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LHX Stock Is Trading at a Discount
LHX is trading at a discount relative to the industry, with a forward 12-month price-to-sales of 1.78X compared with the industry average of 2.19X.
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LHX Stock Price Performance
Over the past year, LHX shares have fallen 21.3% compared with the industry’s 16% decline.
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LHX’s Zacks Rank
LHX stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
