01 Feb 12. Harris Corporation (NYSE:HRS – News) reported revenue in the second quarter of fiscal 2012 of $1.45bn compared with $1.44bn in the prior-year quarter. GAAP net income was $133m, or $1.16 per diluted share, compared with $151m, or $1.18 per diluted share, in the prior year. Non-GAAP net income was $140m, or $1.22 per diluted share, compared with $155m, or $1.20 per diluted share, in the prior year. Revenue and earnings in the prior-year quarter benefited from $80m in expedited shipments of tactical radios to equip MRAP vehicles. Non-GAAP net income excludes acquisition-related costs in both quarters. A reconciliation of
GAAP to non-GAAP financial measures is provided in Tables 5 through 8, along with accompanying notes. Orders in the second quarter were $1.20bn.
RF Communications
Revenue for the RF Communications segment was $526m compared with $545m in the prior year. Tactical Communications revenue of $391m reflected a significant increase in international revenue, which partially offset a decline in Department of Defense revenue. International revenue was driven by major deliveries to countries in Asia and Africa. Public Safety and Professional Communications revenue was $135 m and increased 14 percent over the prior year. Operating income for the RF Communications segment was $172m compared with $189m in the prior year. Orders for the segment totaled $268m, including $183m in Tactical Communications and $85m in Public Safety and Professional Communications. At the end of the second quarter, backlog was $581m in Tactical Communications and $671m in Public Safety and Professional Communications.
Orders in the quarter included $70m from a country in Africa for Falcon
II® radios for the next phase of a multi-year modernization program, bringing orders to a total of $257m for this program that has a potential value of $400m. Orders also included $11 m from the Brazilian Ministry of
Defence for Falcon II and Falcon III® radios in support of multi-year modernization programs, bringing orders to a total of $29m for these programs that have a potential opportunity in excess of $300m over the next several years in this rapidly emerging market. Following the close of the quarter, Harris received a $235m order from the Australian Department of Defence for Falcon II and Falcon III radios for the second phase of JP2072. This is the second order under this potential $500m multi-year modernization program and brings orders to a total of $347m for this program.
Integrated Network Solutions
Revenue for the Integrated Network Solutions segment was $526m, an
increase of 6 percent compared with $496m in the prior year. Revenue benefited from the April 2011 acquisition of Schlumberger’s Global Connectivity Services business. On an organic basis, revenue declined 4 percent primarily as a result of weakness at IT Services. Operating income for the segment was $16m compared with $21m in the prior year. Non-GAAP operating income, excluding acquisition-related costs, was $25m and flat with the prior year, despite the combined loss of $8m in Cyber Integrated Solutions and Healthcare Solutions. New Indefinite Delivery Indefinite Quantity (IDIQ) contract vehicles awarded in the quarter included Connections II from the General Services Administration, with a total ceiling value of $5bn, to deliver IT communications and networking solutions for U.S. federal government agencies worldwide; a five-year, $82m contract with a classified customer to provide a fully-managed, end-to-end communications solution using both terrestrial and satellite capabilities; and a five-year, $31m IT services subcontract for the U.S. Navy Cyber Forces Command OCONUS Navy Enterprise Network (ONE-Net).
Government Communications Systems
Revenue for the Government Communications Systems segment was $422m and flat with the prior year. Operating income was $63m compared with $59m in the prior year. Operating margin was a strong 14.9 percent driven by a