Harris Corp Reports Fiscal 2014 Second
Quarter Results
January 28, 2014
Harris Corporation reported revenue
in the second quarter of fiscal 2014 of $1.22 billion and income
from continuing operations of $137 million, or $1.27 per diluted
share. Income from continuing operations in the prior year was
$142 million, or $1.25 per diluted share. Orders in the second
quarter were $1.47 billion compared with $1.36 billion in the
prior year and book-to-bill for the company was 1.20.
"Second quarter results were solid with earnings per share
above prior year," said William M. Brown, president and chief
executive officer. "Outstanding program execution and
operational excellence improvements, including the benefit of
prior-year restructuring, resulted in higher operating margin.
Orders were higher than in the prior year, and both revenue and
orders were particularly strong in international markets."
RF Communications
Revenue in the second quarter for the RF Communications segment
was $455 million compared with $486 million in the prior year.
Tactical Communications revenue was $320 million, decreasing 5
percent, and Public Safety revenue was $135 million, decreasing
9 percent. Segment operating income was $142 million compared
with $151 million in the prior year. Operating margin was 31.3
percent compared with 31.1 percent in the prior year.
Orders for the segment totaled $512 million. Tactical
Communications orders were $387 million, increasing 35 percent
from the prior year. Public Safety orders were $125 million,
increasing 8 percent. Book-to-bill was 1.13 for the segment, and
backlog was $730 million in Tactical Communications and $591
million in Public Safety.
International tactical radio orders included a $100 million
follow-on order from Australia, $49 million from a country in
the Middle East, $36 million and $21 million from two NATO
countries, and $28 million from a country in Latin America.
Public Safety orders included $20 million from York County,
Pennsylvania and a $14 million follow-on order under the
previously awarded San Francisco Metropolitan Transport
Authority contract.
Integrated Network Solutions
Revenue in the second quarter for the Integrated Network
Solutions segment decreased to $366 million compared with $403
million in the prior year, due to lower revenue from U.S.
Government customers in both CapRock Communications and
Healthcare Solutions. Segment operating income was $33 million,
flat with the prior year.
During the quarter, IT Services received orders totaling $61
million from the U.S. Navy to extend continuity of services on
the Navy/Marine Corps Intranet program, and a $53 million
follow-on order to operate and support the U.S. Air Force Space
Command's 50th Space Wing. Also in the quarter, IT Services was
awarded a position on the 6-year, multi-vendor NETCENTS-2
Products IDIQ contract from the U.S. Air Force with a $6.9
billion ceiling value.
CapRock Communications was awarded a 5-year contract from
Carnival Corporation to provide dual-band satellite voice, data
and Internet services across its fleet of 103 ships and received
a $75 million follow-on order from the Defense Information
Systems Agency to provide end-to-end managed terrestrial network
services.
Government Communications Systems
Revenue in the second quarter for the Government Communications
Systems segment was $433 million, increasing 1 percent compared
with $428 million in the prior year. Major drivers included
higher revenue from classified and space customers, the ramp-up
of the FAA's NextGen DataComm program, and the start of
full-rate production on the Army's Modernization of Enterprise
Terminals (MET) program, partially offset by lower revenue from
NOAA's GOES-R weather program as it transitions to an
integration and test phase. Segment operating income was $66
million compared with $65 million in the prior year. Operating
margin in the second quarter was 15.4 percent and resulted from
strong program performance.
During the quarter, Harris received orders of $46 million
from the FAA for the NextGen DataComm program and $31 million
for avionics infrastructure for the F-35 program as well as
awards totaling $121 million from classified customers.
Earnings Guidance
Harris increased its fiscal 2014 guidance for income from
continuing operations from a range of $4.65 to $4.85 per diluted
share to a range of $4.80 to $4.90 per diluted share. Revenue
guidance remains unchanged from an expected decline of 1 to 3
percent compared with the prior year.
