Was Harris Corporation’s (NYSE:HRS) Earnings Growth Better Than The Industry’s?
Analyzing Harris Corporation’s (NYSE:HRS) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess HRS’s recent performance announced on 29 December 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Harris
How Well Did HRS Perform?
I prefer to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method enables me to assess different stocks in a uniform manner using the most relevant data points. For Harris, its latest trailing-twelve-month earnings is US$633.00M, which, in comparison to the prior year’s level, has increased by a relatively soft 4.11%. Since these figures are somewhat short-term, I have computed an annualized five-year figure for HRS’s earnings, which stands at US$529.09M This means generally, Harris has been able to increasingly grow its profits over the past few years as well.
How has it been able to do this? Well, let’s take a look at if it is only owing to industry tailwinds, or if Harris has seen some company-specific growth. The rise in earnings seems to be supported by a strong top-line increase beating its growth rate of expenses. Though this resulted in a margin contraction, it has made Harris more profitable. Eyeballing growth from a sector-level, the US aerospace & defense industry has been growing, albeit, at a muted single-digit rate of 5.31% over the past twelve months, and 4.84% over the previous five years. This suggests that whatever uplift the industry is benefiting from, Harris has not been able to realize the gains unlike its average peer.
What does this mean?
Though Harris’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Harris gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Harris to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for HRS’s future growth? Take a look at our free research report of analyst consensus for HRS’s outlook.
2. Financial Health: Is HRS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 29 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
