Harris Corporation ( HRS ), a
leader in the public safety and professional communications market,
has received a $63 million contract that entails the company to
provide enterprise messaging services to the Federal Aviation
The National Air Space Enterprise Messaging Service (NEMS) of
Harris Corp will act as network-centric distribution technology for
a variety of data. It includes flight planning, efficient traffic
management, surface radar and weather updates. Further, the NEMS
service will also allow enterprise data sharing that will
facilitate next generation air transportation system.
For some time now, Harris has been developing and integrating
system solutions for the FAA in support of the National Airspace
System (NAS). This is the third contract for the company in quick
succession as the Melbourne, Florida-based Harris received two
multi-million contracts from FAA in the last one month.
We believe the contract will strengthen its Government
Communication Systems order book as the company continues to
benefit from FAA's initiative to modernize the U.S. air traffic
control system with a next generation communication network. The
company is expected to win many such contracts as it has been
selected as a prime contractor for FAA Telecom infrastructure (FTI)
initiative of National Airspace System (NAS).
However, despite winning consistent contracts and a strong order
book, Harris faces stiff competition from companies like
Boeing Co. ( BA ),
General Dynamics Corp. ( GD ) and
Raytheon Co. ( RTN ),
which also provide high-end public safety communication
Recently, Harris declared better-than-expected fiscal
fourth-quarter 2012 financial results with Earnings per Share
meeting the Zacks Consensus Estimate. In the reported quarter,
Government Communication System segment revenue dipped 0.5% year
over year to $497.2 million.
We are maintaining our long-term Neutral recommendation on
Harris Corporation. The company also retains a Zacks #3 Rank,
implying a short-term Hold rating.
BOEING CO (BA): Free Stock Analysis Report
GENL DYNAMICS (GD): Free Stock Analysis Report
HARRIS CORP (HRS): Free Stock Analysis Report
RAYTHEON CO (RTN): Free Stock Analysis Report
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