L3Harris Technologies [LHX] on Tuesday posted higher pro forma sales and operating income in its fourth quarter driven by gains in each of its segments and the company said it is selling its security and detection business to Leidos [LDOS] for $1 billion.

Pro forma sales, which combine revenue from Harris Corp. and the former L3 Technologies, increased 10 percent in the quarter to $4.8 billion from $4.4 billion a year ago. Harris acquired L3 last year and the fourth quarter marks the second quarter of financial results for L3Harris.

Adjusted operating income in the quarter jumped 28 percent to $835 million from $654 million a year ago. Adjusted earnings were $2.85 earnings per share (EPS), topping consensus estimates by a penny, versus $2.22 a year ago.

L3Harris attributed the higher sales to intelligence, surveillance and reconnaissance systems, electro-optical products, avionics for the F-35 Joint Strike Fighter, electronic warfare work on the B-52 bomber, classified systems, tactical communications systems for the Defense Department, integrated vision solutions and defense and commercial aviation systems.

Adjusted operating income rose on higher sales, operating performance, program execution, savings from the merger of Harris and L3, and merger-related accretion. Adjusted operating margin rate was up 2.4 percent to 17.3 percent.

For 2019, pro forma sales increased 10 percent to $18.1 billion from $16.4 billion in 2018. Adjusted operating income rose 22 percent to $3 billion ($10.08 EPS) from $2.5 billion ($7.92 EPS). Adjusted free cash flow for the year was $2.5 billion.

L3Harris introduced guidance for 2020, with organic sales expected to increase between 5 and 7 percent and adjusted operating earnings to be between $11.35 and $11.75 EPS. Analysts are projecting $11.58 EPS this year.

The increase in adjusted EPS will be driven by higher sales, operating efficiencies, cost saving synergies related to the Harris and L3 merger, pension benefits, lower interest payments and a lower share count.

The outlook for adjusted free cash flow in 2020 is between $2.6 billion and $2.7 billion.

L3Harris also said it was divesting its security and detection business and its automation business that were part of the former L3. The businesses have a combined $500 million in sales and provide equipment used in aviation security and critical infrastructure protection.

Leidos’ acquisition of the business units is expected to close during the second quarter.

L3Harris is selling the units to “reshape” its portfolio and focus on core businesses, William Brown, the company’s chairman and CEO, said in a statement.

L3Harris will use the proceeds from the sale to repurchase shares and offset dilution in its share count.