Harris shares edge higher on 2010 outlook

Harris shares edge higher on robust tactical radio outlook in fiscal 2010

• On 1:22 pm EDT, Wednesday October 28, 2009

WASHINGTON (AP) -- Harris Corp. shares jumped 10 percent on Wednesday, a day after the company posted better-than-expected first-quarter results and lifted its outlook.

Both General Dynamics Corp. and Harris are major suppliers of communications technology for the U.S. military; however, Harris has gained an edge, several analysts said in investors' notes.

While rival General Dynamic's Joint Tactical Radio System has been delayed several times, Harris is already shipping its Falcon III manpack and handheld radios to soldiers overseas, said CL King analyst Lawrence Harris.

"It now appears that the Falcon III manpack will benefit from Afghanistan and the late arrival of the competing General Dynamics' product," he added.

The joint tactical radio system is a major Pentagon program that will replace much of the military's existing radio equipment with a new system that will enable easier communication among all of the services.

CL King raised its price target on shares of Harris to $50, up from $46. The analyst also upgraded his rating, to "Strong Buy" from "Accumulate" based on anticipated orders for its tactical radio system.

SunTrust Robinson Humphrey analyst Chris Donaghey agreed that the Melbourne, Fla., company is in a good position. "We anticipate demand to continue for Harris' tactical radio systems both from international and domestic sources." Donaghey has a "Buy" rating on shares.

Analysts said Harris is one of the few big defense-related companies to raise its guidance. The company on Tuesday again raised its fiscal 2010 earnings target, by 45 cents per share, to between $3.85 and $3.95 per share, on strong orders for its tactical radios.

Harris shares advanced $3.88 to $41.82 in afternoon trading. Shares of General Dynamics, based in Falls Church, Va., fell $1.10 to $64.68.

Buzz up!