Industrial technology and communications provider, Harris Corp. (NYSE: HRS – $86.41) reported adjusted earnings per share of $1.45 for the fourth quarter, up from $1.32 a year ago and exceeding the estimate of $1.43 from analysts. Total revenues of $1.90 billion were up from $1.54 billion in the same period in 2015, but missed the Street projection of $1.94 billion. Full-year earnings totaled $5.70 per share. By business segment:
- Communication Systems revenue was $436 million and adjusted operating income was $120 million. Harris was awarded two, 5-year single-award follow-on contracts from U.S. Army Communications-Electronics Command for $1.77 billion and $405 million in support of foreign military sales in the international market in the fourth quarter.
- Space and Intelligence Systems segment revenue was $529 million and operating income was $83 million. In the period, Harris was awarded $81 million and $25 million in follow-on contracts from the U.S. Air Force in support of U.S. missile warning, missile defense and space surveillance missions; a 3-year, $38 million contract for Advanced Baseline Imager spare modules used for weather monitoring on NOAA’s GOES-R satellite program; and a contract from Airbus for a 12-meter folded rib reflector for the European Space Agency’s Biomass satellite.
- Electronic Systems segment revenue was $381 million with adjusted income of $73 million. Orders included $30 million for Sonobuoy Launching Systems for the U.S. Navy’s P8 antisubmarine aircraft; $27 million from the U.S. Naval Research Laboratory for the Advanced Decoy Architecture Project program; $24 million from the U.S. Naval Sea Systems Command to upgrade long-range 3-D defense radar systems; and $22 million from the U.S. Air Force for B-1B aircraft electronic warfare self-protection subsystems. Harris was also awarded an 8-year, $96 million ceiling, single-award contract from the U.S. Naval Air Systems Command to supply precision approach radars to the U.S. Navy, Air Force and Army.
- Critical Networks segment revenue was $575 million and operating income was $81 million. Among other contracts in the quarter, Harris received a 5-year, $245 million ceiling, multi-award follow-on contract to provide engineering and technical services to the Navy.
The company initiated full-year 2017 adjusted guidance in a range of $5.70 to $5.90 per share, straddling the Street projection of $5.85. Initial guidance for 2017 revenue is in a range of $7.11 billion to $7.33 billion, short of the Street estimate of $7.50 billion. The shares, yielding 2.3%, can be considered for a well-diversified aggressive account.