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Harris Corp (HRS) Beats Q3 Earnings, Misses Revenues

Harris Corporation HRS reported third-quarter fiscal 2016 earnings (on an adjusted basis) of $1.45 per share, beating the Zacks Consensus Estimate by 5 cents.
 
Quarterly earnings were 33.3% above the year-ago figure. The Exelis acquisition, completed in May 2015, boosted the quarter’s results. Revenues of $1.91 billion fell short of the Zacks Consensus Estimate of $1.93 billion. Revenues, however, improved 60.8% from the year-ago figure aided by the Exelis deal.
 
Cost of product sales and services in the reported quarter was $1,312 million compared with $754 million in the prior-year quarter. Engineering, selling & administrative expenses totaled $309 million versus $220 million in the third quarter of fiscal 2015.
 
At the end of the reported quarter, the company had cash and cash equivalents of $302 million compared with $481 million at the end of the final quarter of fiscal 2015. Total long-term debt at the end of the third quarter of 2016 stood at $4,319 million, compared with $5,053 million at the end of the fourth quarter of fiscal 2015.
 
Segmental Performance
 
This was the third full quarter at Harris following the Exelis acquisition. With effect from the first quarter of fiscal 2016, the company has been reporting through four operating units, namely, Communication Systems, Critical Networks, Electronic Systems and Space and Intelligence Systems.
 
Revenues at the Communication Systems unit came in at $485 million in the quarter. Segmental operating income (on an adjusted basis) stood at $154 million.
 
Revenues at the Space and Intelligence Systems unit came in at $489 million. Segmental operating income stood at $76 million.
 
Revenues at the Electronic Systems unit came in at $393 million in the reported quarter. Segmental operating income (on an adjusted basis) stood at $75 million.
 
Revenues at the Critical Networks unit came in at $551 million in the reported quarter. Segmental operating income (on an adjusted basis) stood at $59 million.
 
FY16 View 
 
Harris now projects earnings per share (on an adjusted basis) for fiscal 2016 at $5.70 while revenue for the same period is forecasted at $7.5 billion.
 
Zacks Rank & Key Picks
 
Currently, Harris. carries a Zacks Rank #3 (Hold). Investors interested in the broader computer and technology sector may consider better-ranked companies like Sonus Networks, Inc. SONS, CommScope Holding Company, Inc. COMM and ADTRAN Inc. ADTN. Sonus Networks and CommScope sport a Zacks Rank #1 (Strong Buy) while ADTRAN carries a Zacks Rank #2 (Buy).

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ADTRAN INC (ADTN): Free Stock Analysis Report
 
HARRIS CORP (HRS): Free Stock Analysis Report
 
SONUS NETWORKS (SONS): Free Stock Analysis Report
 
COMMSCOPE HLDG (COMM): Free Stock Analysis Report
 
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