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Growth & Income

Harris Corp. (HRS - Analyst Report) compares favorably to its industry. The company’s net profit margin of 8.5% and return on equity (ROE) of 21% tops the industry averages of 2.7% and 5%, respectively. HRS also offers a dividend yield 2%, while most of its industry peers pay no income.

Company Description

Harris is an international communications and information technology company serving government, defense and commercial markets in more than 150 countries. Headquartered in Melbourne, Florida, the company has annual revenue of over $5.3 billion and 16,500 employees - including nearly 7,000 engineers and scientists.

Quarterly results Signal Growth

In late October, the company posted first-quarter fiscal 2009 earnings and saw revenue rise 11% to $1.37 billion from $1.23 billion a year ago. Net income rose 19% to $119 million, or 88 cents per share, from $100 million, or 73 cents, in the first quarter of 2008. Analysts had expected 88 cents in the quarter.

All 4 business segments saw higher revenue in the quarter. Revenue in RF Communications rose 31% year-over-year. It was higher in both the U.S. and international markets.

The company expects revenue growth to remain strong in the remainder of fiscal 2009 and beyond as U.S. allies implement defense communications modernization programs. Harris is seeing strong worldwide demand for tactical radio systems.

The Broadcast Communications segment, which had an 8% increase in year-over-year revenue, benefited from an increase in the sales of Transmission Systems, which was related to the over-the-air digital TV rollout in the U.S. The company is also seeing increased sales due to the global transition to digital and HD products.

Analysts are in Agreement with Harris’ Guidance

Despite a challenging economic environment, Harris reconfirmed is earnings forecast for fiscal 2009, which ranges between $4.05 and $4.15 per share. This would represent a year-over-year earnings increase of 19 to 22% compared to 2008.

Consensus estimates are holding at $4.10 per share over the last 60 days. Analysts project earnings to grow 11.02% in fiscal 2010 over 2009.

Favorable Industry Comparisons include a Rewarding Yield

Harris compares favorably to its industry. The company’s net profit margin of 8.5% and return on equity (ROE) of 21% tops the industry averages of 2.7% and 5%, respectively. HRS also offers a dividend yield 2%, while most of its industry peers pay no income.

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