Harris Reports Fiscal Fourth-Quarter Financials
Tuesday, August 01, 2017 | Comments

Harris reported revenue in the fourth quarter of fiscal 2017 of $1.54 billion compared with $1.53 billion in the prior year. GAAP income from continuing operations was $166 million compared with $142 million in the prior year. Fourth quarter orders were $1.57 billion with a book-to-bill of 1.02.

For the fiscal 2017 full-year period, revenue was $5.9 billion compared with $5.93 billion in the prior year on an organic basis, excluding $60 million of prior-year revenue from the divested aerostructures business. GAAP income from continuing operations was $638 million compared with $611 million in the prior year. Fiscal 2017 orders were $6.03 billion with a book-to-bill of 1.02. Excluding a $400 million voluntary pension contribution in the fourth quarter, fiscal 2017 adjusted net cash provided by operating activities was $969 million and adjusted free cash flow was $850 million.

“Our solid fiscal 2017 results reflect the successful execution of our strategic priorities,” said William M. Brown, chairman, president and CEO. “We completed two important divestitures to focus on technology-differentiated, high-margin businesses while continuing to invest in innovation, drive operational excellence and successfully integrate Exelis. We grew EPS (earnings per share) by 8 percent, generated record free cash flow representing 123 percent of non-GAAP income, and used divestiture proceeds and operational cash to pay down debt, pre-fund pension, and return about $900 million to our shareholders through repurchases and dividends.”

Communication systems revenue in the fourth quarter was $449 million, up 3 percent compared with the prior year. Tactical communications revenue was $334 million, up 8 percent, driven by higher legacy international tactical radio sales. Public-safety revenue was $115 million, down 8 percent. Segment operating income was $146 million compared with $117 million GAAP and $120 million non-GAAP in the prior year, reflecting higher tactical radio volume.

Public-safety awards in the quarter included a five-year, $75 million contract from a utility company to upgrade a legacy analog system to a Project 25 (P25) digital network. Following the close of the quarter, Harris was also awarded a five-year, $461 million, multiaward indefinite delivery/indefinite quantity (IDIQ) contract with an initial $10 million order from the U.S. Army to upgrade and modernize existing LMR system infrastructure.

Electronic systems revenue in the fourth quarter was $591 million, up 4 percent compared with the prior year. Space and intelligence systems revenue in the fourth quarter was $506 million, down 4 percent compared with the prior year.

Initial guidance for fiscal 2018 income from continuing operations is a range of $5.85 to $6.05 per diluted share. Initial guidance for fiscal 2018 revenue is a range of $6.02 billion to $6.14 billion, up 2 to 4 percent from fiscal 2017. Harris expects fiscal 2018 free cash flow in a range of $850 million to $900 million.

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