), a leader in the public safety and professional communications
market, has won a System and Network integration contract from the
U.S. Air Force.
The contract is for one year with three one-year extension
options, and is valued at $46 million. As part of the deal, the
Melbourne-Florida based Harris will provide IT support services for
North American Air Defense Command (NORAD) and U.S. Northern
Command (USNORTHCOM) with most of the work to be done at Peterson
Air Force Base in Colorado. The Harris team is comprised of Abacus
Technology Corporation, Sra International Inc. and Microsoft
NORAD is a bi-national (U.S. and Canada) organization that
prevents air attack, safeguards the sovereign airspace and provides
aerospace and maritime warning to North America. Meanwhile,
USNORTHCOM conducts relief operations during natural disasters like
hurricane, floods and earthquakes.
Harris will provide IT planning, projects, designs, testing,
validation, component installation, diagnostic, software
procurement and repair among others. Harris should deliver best in
class IT infrastructure framework to the U.S. Air Force owing to
its expertise in delivering mission critical IT services to various
Recently, Harris declared its fiscal fourth-quarter 2012
financial results with EPS surpassing the Zacks Consensus Estimate,
Integrated Network Solution generated revenues of $379 million,
down 9.6% year over year.
We believe that winning this contract will improve the company's
Integrated Network Solution order book, which was earlier enriched
by an order worth $750.0 million from the U.S. Department of
State's Bureau of Consular Affairs. Additionally, the company is
trying to capitalize on the current Air Force Investment as it
recently won a $6.5 million order from them.
However, slowdowns in international and national defense
expenditures. coupled with intense competition from the likes of
General Dynamics Corp.
Motorola Solutions, Inc.
), will pressure Harris.
The current Zacks Consensus Estimate for Harris Corp. is pegged
at $1.12 for the fiscal first quarter 2013 with a growth rate
estimate of 5.57%. For fiscal years 2013 and 2014, the Zacks
Consensus Estimates stand at $5.15 and $5.27, respectively, with a
growth rate of (0.93%) and 2.20%.
We maintain our long-term Neutral recommendation on Harris Corp.
Currently, HRS has a Zacks #3 Rank, implying a short-term Hold
rating on the stock.
GENL DYNAMICS (GD): Free Stock Analysis Report
HARRIS CORP (HRS): Free Stock Analysis Report
MOTOROLA SOLUTN (MSI): Free Stock Analysis
To read this article on Zacks.com click here.