Harris Reports Quarterly Financial Results
Wednesday, May 03, 2017 | Comments

Harris reported revenue of $1.49 billion in the third quarter of fiscal 2017, compared with $1.53 billion in the prior year, down 3 percent on an organic basis, excluding $21 million of prior-year revenue from the divested Aerostructures business.

GAAP income from continuing operations was $164 million compared with $159 million in the prior year. As previously announced, current and prior period results reflect CapRock and government IT services as discontinued operations.

“We generated strong results in the third quarter and expect solid operating performance for the fiscal year as we successfully execute our strategy,” said William M. Brown, chairman, president and CEO. “Last week we completed the sale of our government IT services business, which was another major step in our portfolio shaping strategy. As previously communicated, we plan to use proceeds from the divestitures to continue to support our capital allocation priorities, including deleveraging, pre-funding pension and share repurchases.”

Communication systems revenue in the third quarter was $461 million, down 5 percent compared with the prior year. Tactical communications revenue was $357 million, also down 5 percent. In legacy tactical, higher international revenue was partially offset by lower Department of Defense (DoD) revenue, which was anticipated because of the extended continuing resolution. Public-safety revenue was $104 million, down 5 percent. Segment operating income was $140 million compared with $151 million in the prior year, reflecting lower volume.

Public-safety orders included $17 million from Oklahoma City and $15 million from Norman County, Oklahoma. Following the close of the quarter, public safety was awarded a five-year, $75 million contract from a utility to upgrade a legacy analog system to a Project 25 (P25) Phase 2 digital network.

Space and intelligence systems revenue in the third quarter was $475 million, down 3 percent compared with the prior year. Higher revenue from intelligence community customers was more than offset by lower revenue from environmental and space programs transitioning from buildout to sustainment. Segment operating income was $76 million compared with $75 million in the prior year.

Electronic systems revenue in the third quarter was $553 million, flat compared to the prior year on an organic basis, excluding $21 million of prior-year revenue from the divested Aerostructures business.

Harris narrowed its guidance for fiscal 2017 and now expects fiscal 2017 GAAP income from continuing operations of $5.20 to $5.25 per diluted share and non-GAAP income from continuing operations of $5.50 to $5.55 per diluted share, excluding Exelis acquisition-related and other charges. Previous guidance for fiscal 2017 GAAP income from continuing operations was $5.21 to $5.41 per diluted share and non-GAAP income from continuing operations was $5.40 to $5.60 per diluted share, excluding Exelis acquisition-related integration charges.

Harris now expects fiscal 2017 revenue on an organic basis to be down about 1 percent from the prior year, compared with previous guidance of flat to down 2 percent, excluding $60 million of prior-year revenue from the divested Aerostructures business. Harris still expects fiscal 2017 free cash flow to be about $800 million.




 
 
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