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Will Higher Revenues Bolster Harris' (HRS) Q3 Earnings?
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Harris Corporation is scheduled to report third-quarter fiscal 2018 financial results before the opening bell on May 2.
In the last reported quarter, the company delivered a positive earnings surprise of 19.3%. Notably, Harris surpassed the Zacks Consensus Estimate for earnings in three of the last four quarters, with an average beat of 6.7%.
The company is likely to report higher revenues in the quarter backed by healthy growth dynamics. Whether this could result into an earnings beat for the quarter remains to be seen.
Top-Line Expansion
During the quarter, Harris was awarded a $161 million contract modification to supply the next production lot of electronic jammers to protect the U.S. Navy and Australian F/A-18 Hornet and Super Hornet aircraft against electronic threats.
This award was in addition to the $133 million production lot award received in the first quarter of fiscal 2018. The company has received more than $1 billion in awards to date from the Naval Air Systems Command for AN/ALQ-214 development and production.
Also, Harris was selected as the prime systems integrator to modernize and upgrade an Asian nation’s military communications network, extending its role as the country’s incumbent radio provider.
On Mar 1, Harris launched the Geostationary Operational Environmental Satellite-S, its second Advanced Baseline Imager, which was built for the National Oceanic and Atmospheric Administration’s weather-monitoring mission.
These factors are expected to add to the top-line growth of the company. However, high dependency of sales revenues to the U.S. government and cost of operations could hamper Harris’ growth trajectory.
For the fiscal third quarter, the Zacks Consensus Estimate for total revenues stands at $1,548 million, up from $1,489 million reported in the year-earlier quarter. Adjusted earnings per share is pegged at $1.62, up from $1.38 reported a year ago.
Our proven model does not conclusively show that Harris is likely to beat earnings this quarter as it does not possess any of the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Harris has an Earnings ESP of -0.06%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
As it is, we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #1.
Instructure, Inc. (INST - Free Report) has an Earnings ESP of +1.56% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Will Higher Revenues Bolster Harris' (HRS) Q3 Earnings?
Harris Corporation is scheduled to report third-quarter fiscal 2018 financial results before the opening bell on May 2.
In the last reported quarter, the company delivered a positive earnings surprise of 19.3%. Notably, Harris surpassed the Zacks Consensus Estimate for earnings in three of the last four quarters, with an average beat of 6.7%.
The company is likely to report higher revenues in the quarter backed by healthy growth dynamics. Whether this could result into an earnings beat for the quarter remains to be seen.
Top-Line Expansion
During the quarter, Harris was awarded a $161 million contract modification to supply the next production lot of electronic jammers to protect the U.S. Navy and Australian F/A-18 Hornet and Super Hornet aircraft against electronic threats.
This award was in addition to the $133 million production lot award received in the first quarter of fiscal 2018. The company has received more than $1 billion in awards to date from the Naval Air Systems Command for AN/ALQ-214 development and production.
Also, Harris was selected as the prime systems integrator to modernize and upgrade an Asian nation’s military communications network, extending its role as the country’s incumbent radio provider.
On Mar 1, Harris launched the Geostationary Operational Environmental Satellite-S, its second Advanced Baseline Imager, which was built for the National Oceanic and Atmospheric Administration’s weather-monitoring mission.
These factors are expected to add to the top-line growth of the company. However, high dependency of sales revenues to the U.S. government and cost of operations could hamper Harris’ growth trajectory.
For the fiscal third quarter, the Zacks Consensus Estimate for total revenues stands at $1,548 million, up from $1,489 million reported in the year-earlier quarter. Adjusted earnings per share is pegged at $1.62, up from $1.38 reported a year ago.
Our proven model does not conclusively show that Harris is likely to beat earnings this quarter as it does not possess any of the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: Harris has an Earnings ESP of -0.06%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Harris Corporation Price and EPS Surprise
Harris Corporation Price and EPS Surprise | Harris Corporation Quote
Zacks Rank: Harris has a Zacks Rank #4 (Sell).
As it is, we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Casa Systems, Inc. has an Earnings ESP of +6.48% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
EOG Resources, Inc. (EOG - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #1.
Instructure, Inc. (INST - Free Report) has an Earnings ESP of +1.56% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>