Upcoming AWS Coverage on Lumentum Holdings Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 17, 2017 / Active Wall St. announces its post-earnings coverage on Harris Corp. (NYSE: HRS). The Company disclosed its third quarter fiscal 2017 financial results on May 03, 2017. The communications and information technology Company surpassed top- and bottom-line expectations. Register with us now for your free membership at:

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One of Harris' competitors within the Communication Equipment space, Lumentum Holdings Inc. (NASDAQ: LITE), reported on May 04, 2017, results for its fiscal third quarter ended April 1, 2017. AWS will be initiating a research report on Lumentum in the coming days.

Today, AWS is promoting its earnings coverage on HRS; touching on LITE. Get our free coverage by signing up to:

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Earnings Reviewed

For the quarter ended, Harris reported of $1.49 billion compared with revenue of $1.53 billion in Q3 FY16, down 3% on an organic basis, excluding $21 million of prior-year revenue from the divested Aerostructures business. The Company's revenue numbers surpassed analysts' consensus of $1.47 billion.

For Q3 FY17, Harris' GAAP income from continuing operations was $164 million, or $1.31 per diluted share, compared with $159 million, or $1.26 per diluted share, in Q3 FY16. The Company's non-GAAP income from continuing operations was $172 million, or $1.38 per diluted share, compared with $170 million, or $1.35 per diluted share, in the prior year. Non-GAAP income from continuing operations excludes Exelis acquisition-related and other charges in both periods. Harris' earnings results came in ahead of Wall Street's estimates of $1.31 per share.

Segment Results

During Q3 FY17, Harris' Communication Systems segment's revenue totaled $461 million, down 5% on a y-o-y basis. Tactical Communications revenue was $357 million, also down 5% compared to the year ago period. In legacy tactical, higher international revenue was partially offset by lower Department of Defense (DoD) revenue as anticipated due to the extended Continuing Resolution. Public Safety revenue was $104 million for the reported quarter, down 5%. The segment's operating income was $140 million for Q3 FY17 compared with $151 million in Q3 FY16, reflecting lower volume.

For the reported quarter, notable tactical radio orders included $90 million from a country in Eastern Europe, contributing to ongoing strength in Europe; $56 million for the third phase of a modernization program from a country in Northern Africa; $36 million for small tactical airborne terminals for various aircraft; and $42 million in night vision products under DoD IDIQ contracts. Public Safety orders included $17 million from Oklahoma City and $15 million from Norman County, Oklahoma.

For Q3 FY17, Harris' Space and Intelligence Systems segment generated revenue of $475 million, down 3% compared with the prior year. Higher revenue from intelligence community customers was more than offset by lower revenue from environmental and space programs transitioning from build out to sustainment. The segment's operating income was $76 million in the reported quarter compared with $75 million in the prior year.

Harris experienced continued strength in classified programs with contract awards in Q3 FY17, which included a 5-year, $500 million, and single-award IDIQ contract from the National Geospatial Intelligence Agency. Other notable awards were an $80 million contract for a classified customer in a ground-based adjacency and $28 million and $18 million in follow-on contracts in support of US missile warning, missile defense, and space surveillance missions under the System Engineering and Sustainment Integrator (SENSOR) program.

Harris' Electronic Systems revenue in Q3 FY17 was $553 million, flat compared to the prior year on an organic basis, excluding $21 million of prior year revenue from the divested Aerostructures business. On an organic basis, higher revenue from electronic warfare solutions and the UAE integrated battle management system was offset by lower revenue from wireless products and the ADS-B program. For the reported quarter, the segment operating income was $115 million compared with $111 million in the year ago same quarter, thus reflecting continued strong program performance and higher pension income.

Notable contract awards in Q3 FY17 included a 4-year $72 million follow-on contract for Sonobuoy Launching Systems for the US Navy's P-8 antisubmarine aircraft; a 7-year $72 million follow-on contract to provide engineering services for Next Generation Air Traffic Management weather initiatives; and a 3-year $25 million follow-on contract from the US Air Force to support electronic warfare demonstrations.

Guidance

Harris narrowed its guidance for fiscal 2017 and now expects FY17 GAAP income from continuing operations of $5.20 to $5.25 per diluted share and non-GAAP income from continuing operations of $5.50 to $5.55 per diluted share, excluding Exelis acquisition-related and other charges. Previous guidance for FY17 GAAP income from continuing operations was $5.21 to $5.41 per diluted share and non-GAAP income from continuing operations was $5.40 to $5.60 per diluted share, excluding Exelis acquisition-related integration charges. Harris now expects FY17 revenue on an organic basis to declined 1% on a y-o-y basis compared to previous guidance of flat to down 2%. The Company still expects fiscal 2017 free cash flow to be around $800 million.

Stock Performance

At the closing bell, on Tuesday, May 16, 2017, Harris' stock rose slightly by 0.01%, ending the trading session at $108.64. A total volume of 637.66 thousand shares were traded at the end of the day. In the last six months and previous twelve months, shares of the Company have surged 6.09% and 44.08%, respectively. Moreover, the stock gained 6.53% since the start of the year. The stock is trading at a PE ratio of 21.40 and has a dividend yield of 1.95%.

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SOURCE: Active Wall Street