Harris Corp. (NYSE: HRS $150.24) reported fiscal 2018 second quarter revenue of $1.54 billion, up 6% compared with the prior year and in line with most estimates. Adjusted earnings per share from continuing operations was $1.67, compared with $1.38 in the prior year and well above the $1.39 anticipated by Wall Street. Revenue increased 6%, with growth in Communication Systems and Electronic Systems partially offset by a slight decline in Space and Intelligence Systems. Free cash flow was $258 million compared $224 million in the prior year. Orders in the second period rose to $1.39 billion, a 13% increase from new orders in the same period of last year. Shares are higher by about 2% to a record high in today’s otherwise weak equities market.
As a result of the company’s strong first half performance and benefits from tax reform, Harris updated its guidance for fiscal 2018 to the following: Revenue in a range of $6.08 – 6.14 billion, up 3-4% from fiscal 2017 (tightened from previous guidance of $6.02 – 6.14 billion, up 2 – 4%). Adjusted EPS from continuing operations in a range of $6.30 – $6.50 (an increase from previous guidance of $5.85 – $6.05). The Board also approved a share buyback program of $200 million, up from $50 million. Compelling near-term prospects may well continue to drive investor sentiment over the upcoming year.