Harris Reports First-Quarter Fiscal-Year Financial Results
Tuesday, October 31, 2017 | Comments

Harris reported fiscal 2018 first quarter revenue of $1.41 billion, flat compared with the prior year. GAAP operating margins expanded to 19.2 percent from 17.3 percent.

"We are off to a good start in fiscal 2018 with solid first-quarter results, including record orders of $2.3 billion and a book-to-bill of 1.6,” said William M. Brown, chairman, president and CEO. “In addition, our focus on productivity and program execution contributed to 8 percent EPS (earnings per share) growth and drove 70 basis points of margin expansion. These results mark good progress against our strategic priorities and position us to achieve our guidance for the year."

Revenue was flat, as growth in space and intelligence systems and electronic systems was offset by lower volume in communication systems. The improvements in GAAP operating income, margin and EPS were primarily because of Exelis acquisition-related charges incurred in the first quarter of fiscal 2017. The 8 percent EPS increase was driven by higher operating income and lower share count, partially offset by a less favorable tax rate. The 33 percent increase in orders resulted in a book-to-bill of 1.6.

Communications systems segment revenue declined 5 percent, primarily from lower international tactical communications volume. Operating income was flat, as operational efficiencies and lower costs were offset by lower volume. Department of Defense (DoD) tactical communications received several significant orders to meet ongoing base-business demand and support U.S. Army modernization.

Harris generated free cash flow of $72 million and ended the quarter with $388 million of cash, after returning $144 million to shareholders through dividends and share repurchases and reducing debt by $33 million.

Harris reiterated guidance for fiscal 2018 with revenue in a range of $6.02 billion to $6.14 billion, up 2 to 4 percent from fiscal 2017. Free cash flow would be in a range of $850 million to $900 million.

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