Harris Cuts FY 2016 Earnings, Revenue Forecasts on Slowing Middle East Demand

HARRISHarris Corp. (NYSE: HRS) — an S&P 500 company listed in Executive Mosaic’s GovCon Index — has cut full-year revenue guidance for a second consecutive quarter in its current fiscal year with this reduction due to a slowdown in tactical communications product demand from the Middle East.

The Melbourne, Florida-based military radio manufacturer now expects 12-month sales to total approximately $7.5 billion for its 2016 fiscal year compared to its prior outlooks of $7.6 billion-to-$7.68 billion issued in its second quarter financial statement and $7.67-billion-to-$7.83 billion in Harris’ first quarter report.

Harris also adjusted its earnings forecast to $5.70 per share, the lower end of its guidance issued in the second quarter of current its fiscal year.

A plunge in oil prices led Harris to issue a writedown on its maritime communications business for the second quarter that swung the company to a net loss then and scale back revenue forecasts.

Revenue for the third quarter ended April 1 totaled $1.91 billion to fall just short of Wall Street’s $1.92 billion outlook and register an approximate 64.65 percent increase from the prior year period on contributions from Exelis, which Harris purchased for $4.75 billion in May 2015.

Organic growth without Exelis’ additions fell 3.04 percent from the prior year period to $1.91 billion.

Excluding acquisition costs, Harris reported third quarter earnings of $1.45 per share to exceed analyst forecasts by 6 cents and $1.36 EPS when including items related to the Exelis transaction.

Third quarter profit increased 34.92 percent year-over-year to $170 million.

As of Monday’s close, shares in Harris are down 6.95 percent from the start of the year and up one-half percent over 12 months compared to the S&P 500 composite index’s respective gain of 1.83 percent for 2016 to-date and decline of 1.27 percent for 52 weeks.

Video of the Day

GovCon Wire Logo

Sign Up Now! GovCon Wire provides you with Daily Updates and News Briefings about Financial Report

Related Articles