) reported financial results for the fourth quarter of fiscal 2014.
GAAP net income from continuing operations came in at $137.6
million or $1.28 per share compared with a net income of $70.5
million or 65 cents per share in the year-ago quarter. The reported
earnings beat the Zacks Consensus Estimate by a penny.
Harris Corporation - Earnings Surprise |
Moreover, consolidated revenues in the reported quarter stood
at $1,329.4 million, down 2.2% year over year. However, the
figure easily surpassed the Zacks Consensus Estimate of $1,299
Cost of sales in the reported quarter stood at $899.6 million
against $887.8 million in the prior-year quarter. Gross margin was
32.3% compared with 34.7% in the year-ago quarter. Engineering,
selling & administrative expenses totaled $203.9 million
compared with $300.7 million in the comparable year-ago quarter.
Quarterly operating margin was 17% against 12.5% in the year-ago
At the end of the fourth quarter of 2014, Harris generated
$849.2 million of cash from operations against $833 million in the
year-earlier quarter. Free cash flow (cash flow from operations
excluding capital expenditures) in the fourth quarter of 2014 stood
at $639.9 million as against $668.2 million in the year-ago
At the end of fourth-quarter 2014, Harris had cash and cash
equivalents of $561 million compared with $321 million at the end
of fiscal 2013. Total debt stood at $1,575.8 million compared with
$1,577.1 million at the end of fiscal 2013. The
debt-to-capitalization ratio for the reported quarter was 0.46
compared with 0.50 at the end of fiscal 2013.
Government Communications System Segment
Quarterly revenues at the segment were up 2% year over year to
$480 million. Meanwhile, operating income stood at $69 million
versus $54.3 million in the prior-year quarter. Quarterly operating
margin was 14.4% against 11.5% in the year-ago quarter.
RF Communications Segment
Revenues in the quarter came in at $493.2 million, down 1.5%
year over year. Tactical Radio Communications and Public Safety and
Professional Communications segments contributed roughly 70.5% and
29.5%, respectively. Operating income was $140.5 million compared
with $175.7 million in the year-ago quarter. Quarterly operating
margin was 28.5% against 35.1% in the year-earlier quarter.
In the reported quarter, the segment generated orders worth $232
million from the Tactical Radio Communications business and $129
million from the Public Safety and Professional Communications
business. Total order backlog stood at $564 million in the Tactical
Radio Communications segment and $570 million in the Public Safety
and Professional Communications segment.
Integrated Network Solutions
The segment generated revenues of $373.4 million, down 9.4% year
over year. Operating income in the quarter was $32.6 million
compared with a loss of $16.9 million in the year-ago
For fiscal 2015, Harris projected GAAP earnings per share from
continuing operations of $4.75-$5. Moreover, the company expects
revenues to decline 1-3% from fiscal 2014.
Other Stocks to Consider
Harris currently has a Zacks Rank #3 (Hold). Some better-ranked
stocks in the wireless equipment sector are Comtech
Telecommunications Corp. (
), InterDigital, Inc. (
) and DragonWave Inc. (
). Comtech and InterDigital have a Zacks Rank #1 (Strong Buy) while
DragonWave has a Zacks Rank #2 (Buy).
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