Harris Awarded Contracts
Communication and technology provider Harris Corp. (NYSE: HRS – $109.46) has been selected to supply a next-generation, VoIP communication system to support the Republic of Turkey’s air traffic management services following a rigorous review by Turkey’s air navigation service provider. Harris will provide its cloud-based “Voice Communication System for the 21st Century”, which modernizes air traffic management programs by delivering net-centric voice communications that reduce dependency on traditional point-to-point communications, while supporting an efficient transition to IP-based communications. It will be installed at seven facilities in Turkey and will include more than 337 air traffic controller positions that can access up to 52 radio sites across the systems control operations. The price of the contract was not disclosed.
Separately, Melbourne, Florida-based Harris has been awarded a five-year, $403 million, single-award IDIQ contract by the Defense Logistics Agency for tactical radio spares and components for DLA Land and Maritime and the U.S. Army Communications-Electronics Command. The contract is a continuation and expansion of previous contracts with the DLA and will provide support to additional Harris radio families. It allows the Army to secure spare and replacement parts necessary to support Harris’ various model radios.
The shares, reaching an all-time high, are now trading richly at close to 18 times estimated fiscal 2018 earnings and fetch nearly 2% in an annual dividend yield. Hence, shares may be vulnerable to any negative White House announcements on defense contracting, but the company’s low-contract positions vs. those in the multi-billion-dollar range, provide some downside protection. The shares remain a decent holding in an aggressive portfolio for those willing to participate in the communication, national defense and security industries both here and abroad.