Harris Corporation (HRS - Analyst Report), a leader in the public safety and professional communication market, received an order worth $81 million for its Falcon III wideband tactical radio. The order is a part of a $400 million deal with Harris Corporation, where the company will support the U.S. Special Operations Command (USSOCOM) to upgrade its equipment.
As a part of the deal, Harris will provide USSOCOM with its Falcon III AN/PRC-117G radios, which facilitates high bandwidth communications and supports video streaming, and faster voice and data transmission across a battlefield. According to the company, the radio is much lighter than traditional radios, thereby significantly reducing a soldier’s load and offering high degree of mobility and security.
Recently, Harris declared its third quarter 2012 financial results with both revenue and EPS surpassing the Zacks Consensus Estimate. In the reported quarter, the RF Communication segment, which includes Tactical Radio Communications and Public Safety and Professional Communications, won new orders worth $629 million with $534 million in the Tactical Radio Communications business. Total order book in the Tactical Radio Communication segment stood at $717 million.
Falcon III tactical radio is gaining popularity within the Defense sector of several countries and the company expects to win many more deals in that field. We believe that the USSOCOM deal proves Harris Corporation’s ability to support the current and future public safety requirements. Tactical Radios and Public Safety and Professional Communications together provide an opportunity of more than $6 billion.
In spite of winning consistent contracts along with a strong order book, Harris faces stiff competition from companies like Boeing Co. (BA - Analyst Report), General Dynamics Corp. (GD - Analyst Report) and Raytheon Co. (RTN - Analyst Report) which also provide high-end public safety communications system.
Recommendation: We are maintaining our long-term Neutral recommendation on Harris Corporation. Currently Harris Corporation has a Zacks #3 Rank, implying a short-term hold rating on the stock.