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Harris (HRS) to Report Q2 Earnings: What's in the Cards?

Harris CorporationHRS is slated to release second-quarter fiscal 2017 results on Feb 2, before the market opens.

In the last reported quarter, Harris posted a positive earnings surprise of 2.96%. Moreover, the company's earnings surpassed the Zacks Consensus Estimate in each of the previous four quarters, with an average beat of 4.20%.

Let's see how things are shaping up for this announcement.

Factors at Play

We are impressed by the company's product portfolio. The company has also won multiple contracts of late, which should further boost its product portfolio. Its rapid innovation and customer centric approach should favor top-line growth. We are also positive on the company's efforts to reward shareholders through dividends/buy backs.

However, the company operates globally and hence, is exposed to foreign exchange-related risks. We expect the adverse foreign currency movements to limit top-line growth in the second quarter. Additionally, economic slowdown in certain key markets also raises concerns. Though positive on Harris' growth by acquisition strategy, we note that all acquisitions have integration risks associated along with them. Costs related to the acquisitions may limit bottom-line growth.

Focus will also be on whether the company's Critical Networks unit is able to rebound in the second quarter, from a weak first quarter.

Earnings Whispers

Our proven model does not conclusively show that Harris is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below:

Zacks ESP : The Earnings ESP for the company stands at 0.00% as the Most Accurate estimate is in line with the Zacks Consensus Estimate of $1.38 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : Harris has a Zacks Rank #2.

Please note that we advise investors not to consider Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement.

Harris Corporation Price and EPS Surprise

Harris Corporation Price and EPS Surprise | Harris Corporation Quote

Stocks to Consider

Investors who are interested in the in the broader computer & technology sector may consider the following stocks. This is because our model shows that these companies too possess the right combination of elements to post an earnings beat this quarter.

ACI Worldwide, Inc. ACIW has a Zacks Rank #3 and an Earnings ESP of +1.89%. It is expected to report fourth-quarter 2016 results on Feb 23. You can see the complete list of today's Zacks #1 Rank stocks here .

Applied Materials Inc. AMAT carries a Zacks Rank #3 and an Earnings ESP of +6.06%. It is expected to report first-quarter fiscal 2017 results on Feb 16.

AMETEK Inc. AME has a Zacks Rank #3 and an Earnings ESP of +3.45%. It is scheduled to report fourth-quarter 2016 results on Feb 7.

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


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

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