Harris posts $94.8M fiscal 3Q profit

Harris posts 3rd-qtr net income of $94.8M, reverses year-ago loss, beats predictions

Associated Press

MELBOURNE, Fla. (AP) -- Harris Corp. returned to a profit and beat Wall Street expectations for the third quarter even as government budget cuts weighed on the communications and information technology company.

Profits were $94.8 million, or 85 cents per share, for the fiscal quarter ended March 29, compared with a loss of $353.2 million, or $3.13 per share, in the same period last year.

In 2012, the company took a huge charge related to the planned sale of its broadcast communications business.

Excluding one-time items and discontinued operations, the company said it posted a profit from continuing operations of $1.42 per share, coasting by the $1.13 per share analysts had expected, according to a poll by FactSet.

Revenue from product sales and services fell 12 percent to $1.2 billion, which was about in line with Wall Street projections.

Third-quarter orders fell to $1.13 billion from $1.48 billion in the year-ago period.

"Government funding constraints resulting from the continuing resolution were magnified when sequestration was triggered, said President and CEO William Brown. "Additionally, in the international market several key tactical radio orders have been pushed to later in the year or early next fiscal year."

Revenue at the company's RF Communications business, which works with the Department of Defense, fell 22 percent to $418 million. Within that segment, tactical communications revenue dropped 31 percent to $276 million.

Companies, particularly defense contractors, have been paring back costs and downsizing to better fit with a leaner Pentagon. Harris is doing the same.

"We recently announced company-wide restructuring actions that are expected to generate net annualized cost savings of approximately $40 to $50 million," Brown said. "These cost savings, combined with benefits from our ongoing focus on operational excellence and reduced discretionary spending, will allow us to be successful in a challenging government market environment."

The company backed its full-year guidance of an adjusted profit from continuing operations of between $4.60 and $4.70 per share. Analysts expect earnings of $4.69 per share.

Shares of Harris, based in Melbourne, Fla., rose $1.28, or 3 percent, to $45.87 in afternoon trading.

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