Harris Wins Order from Middle East

Zacks

Harris Corporation (HRS), a leader in the public safety and professional communication market, wins a $7.2 million contract from a Middle East country to supply Falcon III RF-7800S Secure Personal Radios and Falcon II high-frequency manpack radios.

Acquisition of these devices will enhance the performance of the security forces by means of offering terrestrial voice and data communications in remote and inaccessible areas for the country’s armed forces.

A lightweight body-worn tactical radio, Falcon III RF-7800S – apart from offering full-duplex voice and data communications over two kilometers also provides dual push-to-talk capabilities and allows simultaneous communication for voice, data and video. The RF-7800S secure personal role radio provides continuous coverage in the 350 to 450 MHz frequency range. This helps in better performance across highly variable environments.

Few days back, Harris received an order from Middle East worth $25 million for its Falcon II high frequency tactical radios as a part of the country’s effort to upgrade its military communication system.

In the recently concluded quarter, Harris reported fourth-quarter 2012 financial results, where EPS met the Zacks Consensus Estimate but revenue missed the same. Tactical Radio Communications, which contributes 70% of the total RF Communication segment revenue, generated new orders worth $356 million. The company ended the fourth quarter of fiscal 2012 with a total order backlog of $665 million in Tactical Radio Communications business.

Despite winning contracts regularly coupled with huge order backlog, the company remains exposed to stiff competition from the likes of Boeing Co. (BA) and Raytheon Co. (RTN), which also provide high-end public safety communication systems.

We maintain our long-term Neutral recommendation on Harris Corporation. Currently, it has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

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