Harris Gets US Air Force Contract - Analyst Blog

By
A A A
Share |

Harris Corporation ( HRS ), 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 Consulting Services.

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 sectors.

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. ( GD ) and Motorola Solutions, Inc. ( MSI ), 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%.

Recommendation:

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 Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: GD , HRS , MSI

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Form 990 Explained
Form 990 Explained                  
Wacky College Scholarships
Wacky College Scholarships          

Stocks

Referenced

100%
100%
100%

Most Active by Volume

109,115,806
  • $60.95 ▼ 0.67%
70,506,064
  • $3.19 ▲ 0.63%
51,567,741
  • $4.265 ▼ 3.51%
44,074,933
  • $16.38 ▲ 0.06%
38,625,294
  • $87.36 ▲ 0.69%
30,004,150
  • $26.13 ▼ 0.46%
29,177,826
  • $46.1599 ▼ 2.68%
26,615,363
  • $33.9899 ▼ 1.16%
As of 4/24/2014, 02:12 PM