Harris Awarded US Navy Radar Contract
Harris Corporation (NYSE: HRS – $83.35) has received a four-year, $113 million contract from the U.S. Naval Sea Systems Command to upgrade the Navy’s primary long-range, three-dimensional defense radar. The contract includes an initial $39 million order and three one-year options. The contract was received in the first quarter of Harris’ fiscal 2016. Harris was awarded the contract under the Navy’s Radar Obsolescence and Availability Recovery program to upgrade AN/SPS-48E radars to the more advanced SPS-48G version, which uses a modern solid-state transmitter. This approach increases fleet readiness to address emerging threats, while lowering the Navy’s total cost of radar ownership. The SPS-48 radar will provide essential surveillance capability for the U.S. Navy, which faces growing and increasingly more complex threats and is expected to remain in operation through the year 2050. The long-term growth picture is encouraging for Harris. In order to offset waning contributions from the military, the company has done a commendable job of diversifying its revenue stream into maritime, healthcare and state and local communications equipment. The shares, within a point of its all-time high set in August, can continue to be held in a well-diversified aggressive account.
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