Harris Corporation (HRS), a leader in the public safety and professional communications market, announced that Denmark-based Norden AS has extended its agreement with it to provide broadband communication to its global fleet of 39 vessels. Notably, the initial contract was awarded to Harris on Mar 2012.
Per the agreement, Harris CapRock Communication will provide each of Norden’s 39 vessels with end to end VSAT (Very Small Aperture Terminal) communication, which will allow internet access, voice communications, and real time monitoring and reporting. Harris will install the equipment and provides round the clock service to Norden through CapRock’s Customer Support Center.
The solution will be beneficial for Norden as it will offer both way transmissions of short messages in real quick time, thus, eliminating the need to send mails. Additionally, the solution is expected to improve the on-board employees’ morale by allowing them to maintain contact with their near and dear ones.
Harris CapRock has installed the VSAT communication solutions in 30 of its global fleet to date. Nevertheless, the company has not divulged the deal extension value.
Recently, Harris declared its third-quarter fiscal 2013 results wherein earnings per share met the Zacks Consensus Estimate. However, in the reported quarter, the Integrated Network Solution segment, which includes Harris CapRock Communication, declared a 6.1% annualized revenue decline.
Tightness in the U.S. government spending for defense coupled with a slowdown in international defense expenditures have forced Harris to reduce its earnings guidance. The ongoing defense budget contraction is expected to affect Harris in the long run.
Of late, the company has won several small contracts for its Tactical Radio System. We believe that these contracts coupled with contract extension in the CapRock Communication division will allow Harris to compensate the loss due to the ongoing defense budget contraction.
Currently, Harris carries a Zacks Rank #4 (Sell).
Other Stocks to Consider
Other stocks in this industry that are worth considering include ShorTel Inc. (SHOR), Ubiquiti Networks Inc. (UBNT) and InterDigital Inc. (IDCC). Ubiquiti and ShorTel currently has a Zacks Rank #1 (Strong Buy), while InterDigital has a Zacks Rank #2 (Buy).
HARRIS CORP (HRS): Free Stock Analysis Report
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