Harris Reports 3rd Quarter Results
Harris Corp. (NYSE: HRS – $78.85) reported revenue in the third quarter of $1.19 billion compared with $1.27 billion in the prior year. Adjusted earnings per share totaled $1.32 vs. $1.27 last year and seven cents above Street estimates. Orders in the period were $1.21 billion compared with $1.11 billion in the prior year. The company generated strong free cash flow of $150 million in the third quarter compared with $120 million in the third quarter of 2014. The company’s RF Communications segment revenue was $451 million compared with $457 million in the prior year of which Tactical Communications increased 6% and Public Safety revenue was $95 million compared with $122 million in the prior year. Government Communications Systems segment revenue in the period fell 5% compared with the prior year. Integrated Network Solutions segment revenue decreased 14%, primarily from the wind-down of two IT Services programs. Harris reiterated fiscal 2015 guidance for income per share to a range of $5.00 to $5.10 and updated revenue guidance from a decline in a range of 1 to 3 percent to a decline of about 4%, but the projection does not include any impact from the pending acquisition of Exelis. Separately, on the heels of a $238 million FAA contract, Harris was awarded a 10-year $3.9 billion ceiling contract from the U.S. Army for rifleman radios and associated services under the Joint Tactical Radio System program. The shares, yielding 2.4%, can be held for further upward appreciation in an aggressive account.