Harris Corp. Wins Military Orders
- Last week an $88 million order was secured to provide an unnamed country in the Middle East with Falcon III wideband tactical radios and accessories as part of an overall modernization effort. Harris’ strong presence in this region, combined with their continued investment in a leading-edge Falcon portfolio of tactical communications products and systems, enables them to transition customers from legacy, voice-dominated communications to modern networked wideband system solutions. These advanced communications systems will support the customer’s current and future operational requirements for simultaneous secure voice and high-bandwidth data across a wide range of missions.
- Yesterday, Falcon III RF-340M multi-channel manpack radios, which offer enhanced command-and-control, have been ordered from Harris from the Department of Defense. This is the second order from the DOD for the RF-340M, demonstrating the growing interest in Harris’ next-generation, two-channel solution for mounted and dismounted tactical communications. The price was not disclosed.
- Today, Harris said it has been awarded a $19 million indefinite delivery/quantity contract to provide the Air Force Special Operations Command (AFSOC) with up to 1,500 Falcon III AN/PRC-152A wideband radios and accessories. The AN/PRC-152A radios and accessories, which will be provided by HRS’ subsidiary, Harris RF Communications, are key components of AFSOC’s communication system.
While domestic defense spending is still trending lower, Harris has been able to buck some of the trend with these smaller contracts vs. the mega-billion defense orders for fighter jets and ships. Also, I like the company’s ventures into international markets, maritime, healthcare, avionics, Department of Homeland Security and state and local communication upgrades, which will mitigate the dwindling defense spending component to some degree. The shares are priced at a reasonable 14 times estimated 2014 earnings and can continue to be held in a well-diversified aggressive account for decent total returns to late decade. And the newly raised dividend to $1.88 per share, sweetens the pot with a 2.7% yield.