Harris Meets Earnings Est. - Analyst Blog
30 Aprile 2013 - 1:20PM
Zacks
Harris Corp. (HRS)
reported mixed financial results for the third quarter of fiscal
2013. GAAP net income from continuing operations was $124.6 million
or $1.12 per share compared with a net income of $154.4 million or
$1.38 per share in the year-ago quarter. Quarterly earnings per
share of $1.12 were in line with the Zacks Consensus Estimate.
However, consolidated revenues in
the reported quarter stood at $1,203.7 million, down 12.1% year
over year, missing the Zacks Consensus Estimate of $1,209 million.
Harris currently carries a Zacks Rank #4 (Sell).
Cost of sales in the reported
quarter was $803.5 million against $879.8 million in the prior-year
quarter. Gross margin was 33.2% compared with 35.7% in the
prior-year quarter. Engineering, selling & administrative
expenses were $202.5 million versus $242 million in the year-ago
quarter. Quarterly operating margin was 16.4% compared with 18% in
the year-ago quarter. The third quarter saw total new orders of
$1.13 billion against $1.48 billion in the prior-year quarter.
In the first nine months of fiscal
2013, Harris generated $513.2 million in cash from operations
compared with $483.2 million in the prior-year period. Free cash
flow (cash flow from operations excluding capital expenditures) for
the reported period was $388.3 million compared with $325.8 million
in the year-ago period.
At the end of the reported quarter,
Harris had cash and cash equivalents of $459 million compared with
$356 million at the end of fiscal 2012. Total debt at the end of
the third quarter was $1,576.1 million compared with $1,883.0
million at the end of fiscal 2012. The debt-to-capitalization ratio
was 0.48 compared with 0.49 at the end of fiscal 2012.
Government Communications
System Segment
Quarterly revenues for the segment
fell 6% year over year to $442.4 million. Operating income in the
quarter was $67.1 million versus $64.1 million in the prior-year
quarter. Quarterly operating margin was 15.2%, remaining same year
over year.
RF Communications
Segment
Revenues in the quarter were $417.7
million, down 22.3% year over year. “Tactical Radio Communications”
and “Public Safety and Professional Communications” contributed
roughly 66% and 34%, respectively. Operating income was $116.1
million compared with $181.6 million in the year-ago quarter.
Quarterly operating margin was 27.8% against 33.8% in the year-ago
quarter.
In the reported quarter, the
segment generated new orders worth $486 million, $297 million from
the Tactical Radio Communications business and $189 million from
the Public Safety and Professional Communications business. Total
order backlog in the Tactical Radio Communications segment was $582
million and $619 million in Public Safety and Professional
Communications.
Integrated Network
Solutions
The segment generated revenues of
$364.5 million, down 6.1% year over year. Operating income in the
quarter was $30.3 million compared with $22.3 million in the
year-ago quarter. Quarterly operating margin was 8.3% compared with
5.7% in the prior-year quarter.
Financial
Outlook
For fiscal 2013, Harris expects
earnings per share from continuing operations of $4.60-$4.70
compared with the prior guidance of $5.00-$5.20 while on a GAAP
basis earnings per share from continuing operations are expected to
be $3.95-$4.33.
Other Stocks to
Consider
Other stocks to consider in the
defense sector and public safety are General Dynamics
Corp. (GD), The Boeing Co. (BA) and
Motorola Solutions Inc. (MSI). Both General
Dynamics and Boeing surpassed the Zacks Consensus Estimate in the
most recent quarter but the net earnings of Motorola Solutions
missed the Zacks Consensus Estimate.
BOEING CO (BA): Free Stock Analysis Report
GENL DYNAMICS (GD): Free Stock Analysis Report
HARRIS CORP (HRS): Free Stock Analysis Report
MOTOROLA SOLUTN (MSI): Free Stock Analysis Report
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