Harris Corp. (HRS), a leading professional communications specialist, has won a series of significant contracts in the last couple of months. Yesterday, the company received a fixed-price, non-option-eligible contract to supply Mid-Tier Networking Vehicular (:MNVR) radios to the U.S. Army. Total contract size is $140.7 million. Additionally, the company received a 3-year $8 million contract from the Department of Veterans Affairs for a Correspondence Tracking Software (CTS) system.
Last month, Harris won two major contracts worth $960 and $150 million, from the U.S. Air force Network-Centric Solutions-2 (NETCENTS-2) Application Services and the Federal Aviation Administration’s (FAA) NextGen Data Communications Program, respectively. Per the deals, Harris will supply an indefinite amount of IT-related products and services for three years to NETCENTS-2 and terrestrial circuits and high-frequency data communication services to the DCNS department of FAA.
Harris has supplied more than 45,000 of its popular Falcon III tactical radios to the U.S. military departments and more than 15 allied countries. The company mostly depends on the U.S. Government contracts for a major part of its revenues. The Defense Department has decided to reduce its budget by nearly $500 billion over the next decade. We believe that the ongoing defense budget contraction may affect Harris in the long run. At this juncture, the recent government contracts appear like a silverlining for the company.
Other Stocks to Consider
Harris currently has a Zacks Rank #3 (Hold). Other stocks in the industry that warrant a look includes Ubiquiti Networks Inc. (UBNT), DragonWave Inc. (DRWI) and Lockheed Martin Corp. (LMT). While Ubiquiti carries a Zacks Rank #1 (Strong Buy), both DragonWave and Lockheed Martin have a Zacks Rank #2 (Buy).