Aggressive · Stocks to Consider and Updates

Harris Tops Views On Earnings, Shy On Revenues; Updates Guidance

HRS  Harris Corp. (NYSE: HRS – $77.89) reported revenue in the second quarter of fiscal 2016 of $1.84 billion, compared with $1.21 billion in the prior year. Income from continuing operations was $187 million, or $1.49 per diluted share, excluding a non-cash charge related to CapRock, acquisition-related items, restructuring and other charges. This compares to adjusted earnings of $1.32 in the second quarter of fiscal 2015 and $0.13 above Street estimates. Revenue, however, fell short of consensus of $1.9 billion. On a business-by-business basis:

  • Communication Systems segment revenue in the second quarter was $489 million. Segment operating income was $121 million, and adjusted operating income was $138 million, excluding restructuring and other charges.
  • Space and Intelligence Systems segment revenue in the second quarter was $446 million and operating income was $67 million.
  • Electronic Systems segment revenue in the second quarter was $382 million. Segment operating income was $63 million, and adjusted operating income was $69 million, excluding restructuring and other charges.
  • Critical Networks segment revenue for the period was $541 million with an adjusted operating income, excluding CapRock, restructuring and other charges, of $71 million.

        Looking ahead, Harris increased its guidance for fiscal 2016 income from continuing operations from a range of $5.60-$5.80 per diluted share to a range of $5.70-$5.80 per diluted share, excluding the non-cash charge related to CapRock, acquisition-related items, restructuring and other charges. The shares were sharply lower on the news, but positions can be maintained.

HRS

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