Press Release

Harris Corporation Reports Fiscal 2015 First Quarter Results

By SpaceRef Editor
October 28, 2014
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Harris Corporation (NYSE:HRS) reported revenue in the first quarter of fiscal 2015 of $1.16 billion and income from continuing operations of $125 million, or $1.18 per diluted share. In the prior year, revenue was $1.19 billion and income from continuing operations was $128 million, or $1.18 per diluted share. Orders in the quarter were $1.11 billion. Also during the quarter, Harris increased its dividend 12 percent and used $100 million of cash to repurchase shares.

“First quarter results reflected strong revenue and orders growth in Government Communications Systems and in RF Communications’ international tactical radio business,” said William M. Brown, chairman, president and chief executive officer. “Operating performance was solid and resulted from lowering costs through operational excellence initiatives, focusing on program execution, and providing the marketplace with innovative solutions.”

RF Communications
RF Communications segment revenue in the first quarter was $387 million compared with $423 million in the prior year. Tactical Communications revenue was $276 million, decreasing 9 percent, and Public Safety revenue was $111 million, decreasing 6 percent. Segment operating income was $117 million compared with $135 million in the prior year.

Orders for the segment totaled $374 million, including $288 million in Tactical Communications and $86 million in Public Safety. Book-to-bill for the segment was 0.97 and funded backlog was $575 million in Tactical Communications and $532 million in Public Safety.

Tactical radio orders included $88 million and $11 million from a country in the Middle East, $18 million from a country in Asia, and $18 million from the Philippines. Harris was also awarded a 4-year, C$180 million ceiling, single-award Indefinite Delivery Indefinite Quantity (IDIQ) contract from the Canadian Department of National Defense and a 5-year, $19 million ceiling, single-award IDIQ contract from the U.S. Air Force Special Operations Command. Public Safety orders included an $11 million follow-on order from St. Mary’s County, Maryland for Phases 2 and 3 of a county-wide public safety radio network, bringing orders-to-date to $32 million.

Government Communications Systems
Government Communications Systems segment revenue in the first quarter was $461 million, increasing 12 percent compared with $412 million in the prior year. Major drivers included higher revenue from classified customers, commercially hosted payload programs, the F-35 program, and the FAA’s NextGen DataComm program, partially offset by lower revenue from NASA’s Space Network Ground Segment Sustainment program. Segment operating income was $74 million compared with $64 million in the prior year. Operating margin was 16.0 percent, which reflects continued strong program performance.

During the quarter, Harris was awarded a 5-year, $495 million ceiling, multi-award IDIQ contract from the U.S. Air Force for the Hosted Payload Solutions (HoPS) program; a 3-year, $20 million contract from the National Oceanic and Atmospheric Administration (NOAA) to provide a GOES-R rebroadcast solution to several National Weather Service centers; a $22M follow-on contract for the F-35 program; and awards totaling $83 million from classified customers.

Integrated Network Solutions
Integrated Network Solutions segment revenue in the first quarter was $326 million, decreasing 13 percent compared with $376 million in the prior year, primarily due to the wind-down of two IT Services programs. Segment operating income was $23 million compared with $30 million in the prior year.

During the quarter, IT Services was awarded a 3-year, $24 million contract and a 5-year $20 million contract from the Federal Bureau of Investigation. CapRock Communications orders included a $15 million follow-on order under the Future Commercial SATCOM Acquisition (FCSA) program and follow-on orders from Royal Caribbean Cruises Ltd. and Carnival Corporation for advanced communications solutions, including increased bandwidth on existing service. Healthcare Solutions was awarded contracts for FusionFX® software from Phoebe Putney Health System in the U.S., Telus Health in Canada, and National Health Service-East Kent in the U.K.

Earnings Guidance
Harris reiterated its fiscal 2015 guidance for income from continuing operations in a range of $4.75 to $5.00 per diluted share and for revenue declining 1 to 3 percent compared with the prior year.

Harris will host a conference call today, Oct. 28, at 8:30 a.m. Eastern Time (ET) to discuss its first quarter fiscal 2015 financial results. The dial-in numbers for the teleconference are (877) 303-9481 (U.S.) and (760) 666-3582 (International), using participant code 8160120. Please allow at least 10 minutes before the scheduled start time to connect to the teleconference. Participants are encouraged to listen via live webcast and view management’s supporting slide presentation at www.harris.com/webcast/quarterly/2015Q1. A recording of the call will be available on the Harris website beginning at approximately 12 p.m. ET on Oct. 28.

About Harris Corporation
Harris is an international communications and information technology company serving government and commercial markets in more than 125 countries. Headquartered in Melbourne, Florida, the company has approximately $5 billion of annual revenue and about 14,000 employees — including 6,000 engineers and scientists. Harris is dedicated to developing best-in-class assured communications® products, systems, and services. Additional information about Harris Corporation is available at harris.com.

Attachments: Financial Statements (4 tables) (PDF).

SpaceRef staff editor.