Click here to close now.

SYS-CON MEDIA Authors: Liz McMillan, Pat Romanski, Carmen Gonzalez, Blue Box Blog, Lori MacVittie

News Feed Item

Harris Corporation Reports Fiscal 2014 Second Quarter Results

Harris Corporation (NYSE:HRS) 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.

Harris will host a conference call today, January 28, at 8:30 a.m. Eastern Time (ET) to discuss its second quarter fiscal 2014 financial results. The dial-in numbers for the teleconference are (877) 303-9481 (U.S.) and (760) 666-3582 (International), using participant code 32037311. 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/conference-call. A recording of the call will be available on the Harris website beginning at approximately 12 p.m. ET on January 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.

Forward-Looking Statements

Statements in this press release that are not historical facts are forward-looking statements that reflect management’s current expectations, assumptions and estimates of future performance and economic conditions. Such statements are made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this release include but are not limited to: earnings and revenue guidance for fiscal 2014; potential contract opportunities and awards; the potential value of contract awards; and statements regarding outlook. The company cautions investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements. The company's consolidated results and the forward-looking statements could be affected by many factors, including but not limited to: the loss of the company’s relationship with the U.S. Government or a change or reduction in U.S. Government funding; potential changes in U.S. Government or customer priorities and requirements (including potential deferrals of awards, terminations, reductions of expenditures, changes to respond to the priorities of Congress and the Administration, budgetary constraints, debt ceiling implications, and cost-cutting initiatives); the potential impact of a security breach, through cyber attack or otherwise, or other significant disruptions of the company’s IT networks and systems or those the company operates for customers; risks inherent with large long-term fixed-price contracts, particularly the ability to contain cost overruns; financial and government and regulatory risks relating to international sales and operations; the continued effects of the general weakness in the global economy and U.S. Government’s budget deficits and national debt; the company’s ability to continue to develop new products that achieve market acceptance; the consequences of future geo-political events; strategic acquisitions and the risks and uncertainties related thereto, including the company’s ability to manage and integrate acquired businesses; performance of the company’s subcontractors and suppliers; potential claims that the company is infringing the intellectual property rights of third parties; the successful resolution of patent infringement claims and the ultimate outcome of other contingencies, litigation and legal matters; risks inherent in developing new technologies; changes in the company’s effective tax rate; the potential impact of natural disasters or other disruptions on the company’s operations; the potential impact of changes in the regulatory framework that applies to, or of satellite bandwidth constraints on, the company’s managed satellite and terrestrial communications solutions; and changes in future business or other market conditions that could cause business investments and/or recorded goodwill or other long-term assets to become impaired. Further information relating to factors that may impact the company's results and forward-looking statements are disclosed in the company's filings with the SEC. The forward-looking statements contained in this release are made as of the date of this release, and the company disclaims any intention or obligation, other than imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

For additional information, contact Harris Corporation at [email protected].

 
 
 
 
 
Table 1
HARRIS CORPORATION
FY '14 Second Quarter Summary
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
           
Quarter Ended Two Quarters Ended
December 27, December 28, December 27, December 28,
2013 2012 2013 2012
(In millions, except per share amounts)
 
Revenue from product sales and services $ 1,223.2 $ 1,286.9 $ 2,415.1 $ 2,548.4
 
Cost of product sales and services (795.4 ) (845.4 ) (1,569.9 ) (1,693.7 )
Engineering, selling and administrative expenses (204.7 ) (213.1 ) (412.5 ) (411.3 )
Non-operating income (loss) 3.2 (1.1 ) 4.5 (1.1 )
Interest income 0.7 0.5 1.3 1.0
Interest expense   (23.7 )   (27.6 )   (47.4 )   (55.5 )
 
Income from continuing operations before income taxes 203.3 200.2 391.1 387.8
Income taxes   (66.2 )   (61.7 )   (126.6 )   (121.0 )
Income from continuing operations 137.1 138.5 264.5 266.8
Discontinued operations, net of income taxes   (1.0 )   (93.7 )   (2.7 )   (308.0 )
Net income (loss) 136.1 44.8 261.8 (41.2 )
Noncontrolling interests, net of income taxes   0.1     3.7     0.2     3.9  
Net income (loss) attributable to Harris Corporation $ 136.2   $ 48.5   $ 262.0   $ (37.3 )
 

Net income (loss) per common share attributable to Harris Corporation common shareholders

Basic
Continuing operations $ 1.28 $ 1.26 $ 2.47 $ 2.42
Discontinued operations   (0.01 )   (0.83 )   (0.03 )   (2.75 )
$ 1.27   $ 0.43   $ 2.44   $ (0.33 )
 
Diluted
Continuing operations $ 1.27 $ 1.25 $ 2.45 $ 2.40
Discontinued operations   (0.01 )   (0.82 )   (0.03 )   (2.73 )
$ 1.26   $ 0.43   $ 2.42   $ (0.33 )
 
Cash dividends paid per common share $ 0.42 $ 0.37 $ 0.84 $ 0.74
 
Basic weighted average common shares outstanding 106.3 112.3 106.3 112.1
Diluted weighted average common shares outstanding 107.3 112.9 107.3 112.7
 
 
 
 
 
 
Table 2
HARRIS CORPORATION
FY '14 Second Quarter Summary
BUSINESS SEGMENT INFORMATION
(Unaudited)
           
Quarter Ended Two Quarters Ended
December 27, December 28, December 27, December 28,
2013 2012 2013 2012
(In millions)
Revenue
RF Communications $ 454.6 $ 486.0 $ 877.6 $ 930.7
Integrated Network Solutions 365.9 403.1 741.5 788.6
Government Communications Systems 433.0 428.2 844.6 882.7
Corporate eliminations   (30.3 )   (30.4 )   (48.6 )   (53.6 )
$ 1,223.2   $ 1,286.9   $ 2,415.1   $ 2,548.4  
Income From Continuing Operations Before Income Taxes
Segment Operating Income:
RF Communications $ 142.1 $ 151.0 $ 277.3 $ 285.1
Integrated Network Solutions 32.7 32.9 62.4 66.0
Government Communications Systems 66.5 64.8 130.5 131.2
Unallocated corporate expense (14.4 ) (17.7 ) (30.4 ) (34.4 )
Corporate eliminations (3.8 ) (2.6 ) (7.1 ) (4.5 )
Non-operating income (loss) 3.2 (1.1 ) 4.5 (1.1 )
Net interest expense   (23.0 )   (27.1 )   (46.1 )   (54.5 )
$ 203.3   $ 200.2   $ 391.1   $ 387.8  
 
 
 
 
 
 
Table 3
HARRIS CORPORATION
FY '14 Second Quarter Summary
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
         
Two Quarters Ended
December 27, December 28,
2013 2012
(In millions)
Operating Activities
Net income (loss) $ 261.8 $ (41.2 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 100.4 110.2
Share-based compensation 18.5 15.0
Non-current deferred income taxes 25.2 0.2
Gain on sale of securities available-for-sale (9.0 )
Loss on sale of discontinued operations 2.7
Impairment of assets of discontinued operations 320.7
(Increase) decrease in:
Accounts and notes receivable (2.7 ) 57.6
Inventories (20.0 ) (9.9 )
Increase (decrease) in:
Accounts payable and accrued expenses (56.4 ) (151.0 )
Advance payments and unearned income (9.5 ) 39.8
Income taxes (1.0 ) (49.1 )
Other   (39.5 )   (3.8 )
Net cash provided by operating activities   279.5     279.5  
 
Investing Activities
Cash paid for cost-method investment (0.8 )
Additions of property, plant and equipment (85.0 ) (79.9 )
Additions of capitalized software (2.8 )
Proceeds from sale of discontinued operations 27.0
Proceeds from sale of securities available-for-sale       11.9  
Net cash used in investing activities   (58.0 )   (71.6 )
 
Financing Activities
Proceeds from borrowings 3.1 10.4
Repayments of borrowings (62.6 ) (129.4 )
Proceeds from exercises of employee stock options 99.8 78.4
Repurchases of common stock (156.8 ) (114.2 )
Cash dividends   (90.4 )   (84.0 )
Net cash used in financing activities   (206.9 )   (238.8 )
 
Effect of exchange rate changes on cash and cash equivalents   (1.2 )   3.0  
 
Net increase (decrease) in cash and cash equivalents 13.4 (27.9 )
 
Cash and cash equivalents, beginning of year   321.0     356.0  
 
Cash and cash equivalents, end of quarter $ 334.4   $ 328.1  
 
 
 
 
 
 
Table 4
HARRIS CORPORATION
FY '14 Second Quarter Summary
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
         
December 27, June 28,
2013 2013
(In millions)
Assets
 
Cash and cash equivalents $ 334.4 $ 321.0
Receivables 699.5 696.8
Inventories 688.8 668.7
Income taxes receivable 38.4 36.2
Current deferred income taxes 119.1 121.2
Other current assets 92.2 77.2
Current assets of discontinued operations 27.0
Property, plant and equipment 668.9 653.2
Goodwill 1,702.1 1,692.0
Intangible assets 285.8 308.1
Non-current deferred income taxes 99.5 124.8
Other non-current assets   155.4   132.2
$ 4,884.1 $ 4,858.4
Liabilities and Equity
 
Short-term debt $ 93.7 $ 144.6
Accounts payable 341.5 339.5
Compensation and benefits 194.2 234.3
Other accrued items 217.2 255.8
Advance payments and unearned income 298.5 308.0
Current deferred income taxes 1.0 1.8
Current portion of long-term debt 4.7 13.4
Long-term debt 1,577.1 1,577.1
Long-term contract liability 90.5 96.8
Other long-term liabilities 352.5 325.9
Equity   1,713.2   1,561.2
$ 4,884.1 $ 4,858.4
 
 
 

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Blue Box has been named “Bronze Sponsor” of SYS-CON's DevOps Summit New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Blue Box delivers Private Cloud as a Service (PCaaS) to a worldwide customer base. Built on a technology platform leveraging decades of operational expertise in cloud and distributed systems, Blue Box Cloud is a managed private cloud product available in both hosted and on-prem versions. Each Blue Box ...
Many of the well-known examples of DevOps success we read in blogs on the Internet paint an idyllic picture of DevOps productivity. A team was facing a stodgy, slow-moving operations department, teams weren’t delivering software on time. Those teams moved to DevOps, became proactive about infrastructure and deployment automation, and an overnight transition to productivity ensues. People are promoted, projects are successful, and developers and system administrators dance hand-in-hand in a final...
SYS-CON Events announced today that Secure Infrastructure & Services will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY, and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Secure Infrastructure & Services (SIAS) is a managed services provider of cloud computing solutions for the IBM Power Systems market. The company...
Enterprise IoT is an exciting and chaotic space with a lot of potential to transform how the enterprise resources are managed. In his session at @ThingsExpo, Hari Srinivasan, Sr Product Manager at Cisco, will describe the challenges in enabling mass adoption of IoT, and share perspectives and insights on architectures/standards/protocols that are necessary to build a healthy ecosystem and lay the foundation to for a wide variety of exciting IoT use cases in the years to come.
SYS-CON Events announced today that CenturyLink, Inc., a leader in the network services market, has been named “Platinum Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. CenturyLink is the third largest telecommunications company in the United States and is recognized as a leader in the network services market by technology industry analyst firms. The company is a global leader in cloud infrastructure and ...
Docker is becoming very popular--we are seeing every major private and public cloud vendor racing to adopt it. It promises portability and interoperability, and is quickly becoming the currency of the Cloud. In his session at DevOps Summit, Bart Copeland, CEO of ActiveState, discussed why Docker is so important to the future of the cloud, but will also take a step back and show that Docker is actually only one piece of the puzzle. Copeland will outline the bigger picture of where Docker fits a...
SYS-CON Events announced today the DevOps Foundation Certification Course, being held June ?, 2015, in conjunction with DevOps Summit and 16th Cloud Expo at the Javits Center in New York City, NY. This sixteen (16) hour course provides an introduction to DevOps – the cultural and professional movement that stresses communication, collaboration, integration and automation in order to improve the flow of work between software developers and IT operations professionals. Improved workflows will res...
Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch ...
A new definition of Big Data & the practical applications of the defined components & associated technical architecture models This presentation introduces a new definition of Big Data, along with the practical applications of the defined components and associated technical architecture models. In his session at Big Data Expo, Tony Shan will start with looking into the concept of Big Data and tracing back the first definition by Doug Laney, and then he will dive deep into the description of 3V...
As cloud gives an opportunity to businesses to buy services externally – how is cloud impacting your customers? In his General Session at 15th Cloud Expo, Fabio Gori, Director of Worldwide Cloud Marketing at Cisco, provided answers to big questions: Do you see hybrid cloud as where the world is going? What benefits does it bring? And how does Cisco connect all of these clouds? He also discussed Intercloud and Cisco’s investment on it.
SYS-CON Events announced today that B2Cloud, a provider of enterprise resource planning software, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. B2cloud develops the software you need. They have the ideal tools to help you work with your clients. B2Cloud’s main solutions include AGIS – ERP, CLOHC, AGIS – Invoice, and IZUM
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY., and the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MangoApps provides private all-in-one social intranets allowing workers to securely collaborate from anywhere in the world and from any device. Social, mobile, and eas...
There is no doubt that Big Data is here and getting bigger every day. Building a Big Data infrastructure today is no easy task. There are an enormous number of choices for database engines and technologies. To make things even more challenging, requirements are getting more sophisticated, and the standard paradigm of supporting historical analytics queries is often just one facet of what is needed. As Big Data growth continues, organizations are demanding real-time access to data, allowing immed...
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on T...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.