), a leader in the public safety and professional communications
market, has got an extension of its contract from the US Air
Force Space Command. The company has won the fifth option year of
its multi-year Network and Space Operations and Maintenance
The NSOM contract - initially awarded in 2008 with a total order
value of $418 million - is to be executed over six and a half
years. The fifth option year contract, worth around $66 million,
brings the total order value to $351 million to date. Harris has
been supporting the US Air Force Space Command's 50th space wing
for the last seventeen years, which is indicative of the high
security that its products offer.
Harris's execution team includes Lockheed Martin Information
Technology, ASRC aerospace and Avaya Government Solutions, among
others. As part of the contract, Harris will provide
operational and maintenance support to the Air Force Satellite
Control Network's equipment at ten different locations around the
Recently, Harris declared its first-quarter fiscal 2013 results
wherein earnings per share beat the Zacks Consensus Estimate. In
the reported quarter, the Integrated Network Solution segment,
which includes IT, Cyber and Healthcare declared a revenue
decline of 10.2%.
We believe this latest contract will boost the company's IT
service revenue, which has shrank considerably in the last few
quarters and consequently has dampened the Integrated Network
Solution segment's growth. Additionally, successful execution of
the contract will allow the company to effectively clinch the
remaining portion of the deal.
However, despite winning consistent contracts and a strong order
book, Harris faces stiff competition from companies like
General Dynamics Corp.
), which also provide high-end public safety communication
We are maintaining our long-term 'Neutral' recommendation on
Harris Corporation. Currently, it holds a Zacks #3 Rank, implying
a short-term Hold rating.
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