29 Oct 13. Harris Corporation (NYSE:HRS) reported revenue
in the first quarter of fiscal 2014 of $1.19bn and income from continuing operations of $128m, or $1.18 per diluted share. Income from continuing operations in the prior year was $129m, or $1.14 per diluted share. Orders in the first quarter were $1.20bn. The company generated free cash flow (net cash provided by operating activities less capital expenditures) of $139m in the first quarter compared with $77m in the prior year. Free cash flow was 109 percent of income from continuing operations. During the quarter, Harris increased its dividend 13.5 percent, used $100m in cash to repurchase common stock, and approved a new $1bn share repurchase authorization.
RF Communications
Revenue in the first quarter for the RF Communications segment was $423m compared with $445m in the prior year. Tactical Communications revenue was $305m, decreasing 1 percent, and Public Safety revenue was $118m, decreasing 14 percent. Segment operating income was $135m compared with $134m in the prior year. Operating margin was 32.0 percent compared with 30.2 percent in the prior year. Segment orders totalled $348m, including $225m in Tactical Communications. Public Safety orders were $123m, increasing 12 percent compared with the prior year. Book-to-bill was .82 for the segment, and backlog was $664m in Tactical Communications and $607m in Public Safety. During the quarter, Harris was awarded a 2-year, $141m sole-source, Indefinite Delivery Indefinite Quantity (IDIQ) contract from the U.S. Army for the Mid-Tier Networking Vehicular Radio (MNVR) program and received an initial order of $8m for up to 232 radio systems. Following the close of the quarter, Harris was awarded an $847m increase in the ceiling value of its sole-source, IDIQ contract with the U.S. Army Communications-Electronics Command (CECOM), which supports international sales of tactical radio systems under the U.S. Government’s Foreign Military Sales program. Public Safety orders in the quarter included $40m from Mobile County, Alabama, to deploy a P25 emergency communications system.
Integrated Network Solutions
Revenue in the first quarter for the Integrated Network Solutions segment was $376m compared with $386m in the prior year, due to lower revenue from U.S. Government customers in both IT Services and CapRock Communications. Segment operating income was $30m compared with $33m in the prior year. During the quarter, IT Services orders included $89m from the U.S. Department of Veterans Affairs (VA) for the expansion of its wireless network infrastructure, $35m from the U.S. State Department under the Consular Affairs Support Services contract, and $22m from the U.S. Air Force to provide enterprise IT support services for the North American Air Defense Command (NORAD) and U.S. Northern Command (USNORTHCOM). Other awards included a $65m follow-on contract to provide worldwide satellite data and communications support for the U.S. Air Force’s Satellite Control Network and Global Positioning System antenna sites, and a 7-year, multi-vendor Network-Centric Solutions-2 (NETCENTS-2) Applications Services IDIQ contract from the U.S. Air Force with a $960m ceiling value.
Government Communications Systems
Revenue in the first quarter for the Government Communications Systems segment was $412m, declining 9 percent compared with $455m in the prior year, primarily due to the timing of NOAA’s GOES-R weather program transitioning to an integration and test phase and from lower revenue from Department of Defense customers, partially offset by higher revenue from classified customers and from other civil agency customers, including the FAA. Segment operating income was $64m compared with $66m in the prior year. Operating margin in the first quarter was 15.5 percent and resulted from strong program performance. During the quarter, Harris was awarded a 7-year, $150m contract from the FAA to provide the Data Communication Network Se