(HRS) Harris Corp. Wins Follow-on Contract

Communications technology company Harris Corp. (HRS) received a follow-on contract worth $297.7 million from the U.S. Navy. Per the contract, Harris will deliver portable radios and related parts to the Navy department.

Procurement of these devices by the U.S. Navy forces will enhance their service quality and help them provide improved network support, thereby fostering them to complete the mission successfully. The extended lot of radio systems are projected to be interchangeable and interoperable with Harris radio families AN/PRC-117, AN/PRC-150, and AN/PRC-152 used in the field now.

In the recently concluded quarter, Harris reported fourth-quarter 2012 financial results, where EPS met the Zacks Consensus Estimate but revenue missed the same. Tactical Radio Communications, which contributes 70% of the total RF Communication segment revenue, generated new orders worth $356 million. The company ended the fourth quarter of fiscal 2012 with a total order backlog of $665 million in Tactical Radio Communications business.

Despite winning consistent contracts coupled with huge order backlog, the company remains exposed to stiff competition from the likes of Boeing Co. (BA), General Dynamics Corp. (GD) and Raytheon Co. (RTN), which also provide high-end public safety communication systems.

We maintain our long-term Neutral recommendation on Harris Corporation. Currently, it has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

Harris Corporation, based in Melbourne, Florida, remains one of the leaders in the public safety and professional communication market and boasts products ranging from industry leading multi-band, multi-mode radios, public safety-grade broadband voice, video and data solutions.

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