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HARRIS SHARES JUMP ON PROFIT OUTLOOK

20 Jan 04. Harris Corp. (NYSE:HRS – News) shares soared as much as 14 percent on Tuesday after the communications equipment maker raised its fiscal 2004 earnings forecast, citing stronger sales in its tactical radio and government divisions.

“For the second quarter in a row, they’ve said results were going to be greater than analysts’ expectations,” Oppenheimer analyst Lawrence Harris said. Harris, who is not related to company, recommends buying its stock, which he doesn’t own.

“Both divisions are benefiting from the war on terrorism and cost-cutting initiatives in the commercial business are having some impact as well.”Harris, which makes secure wireless systems for the military, raised its net earnings forecast for the year ended July 2 to a range of $1.85 to $1.95 per share from a previous estimate of $1.50 to $1.65. The Melbourne, Florida-based company also estimated fiscal second-quarter earnings of 50 cents per share, compared with 25 cents in the year-ago period.

Wall Street analysts’ forecasts averaged $1.64 a share for fiscal 2004 and 40 cents a share for the second quarter, according to Reuters Research, a unit of Reuters Group Plc.

Harris said it expects second-quarter revenue to rise to $605m from $524m a year earlier. The company is expected to release its official financial results on Jan. 27 after the stock market close. Military radio maker Rockwell Collins Inc. (NYSE:COL – News), too, has benefited from stronger government sales. The company on Jan. 13 raised its 2004 profit forecast, sending its shares up more than 8 percent. Harris shares soared as high as $46.22, before trading up $5.68, or 14 percent, at $46.18 on the New York Stock Exchange (News – Websites) at mid-afternoon.

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