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Harris Corporation (HRS - Analyst Report), a leader in the public safety and professional communication market, has won a major IT Solution contract from the U.S. Department of State-Bureau of Consular Affairs.

As a part of the deal, the Melbourne-Florida based company will provide technical support which includes innovating new IT solutions, upgrading and enhancing the existing IT solutions coupled with delivering maintenance services to the state Consular affairs department. The $750 million contract will be executed by Harris Corp.’s team that comprises nine other companies like ABS Consulting, AMDEX Corp., Credence and AT&T Inc. (T - Analyst Report) owned AT&T Government Solutions, among others.

The order will be executed by Harris Corp.’s IT service division which has pioneered in providing mission critical solutions like IT transformation, managed services, and secure information network. According to the agreement, the U.S. Department of State-Bureau of Consular affairs will purchase indefinite number of blanket products from Harris Corp. which will help the government organization support its automated Visa, Passport and American Citizen Service’s division.

Harris Corp. has been providing technical services to the Department of State for over 16 years. It has supported more than 250 departments of the state consulates, embassies and passport agencies in providing better services to national as well as the foreign travelers.

Recently, Harris declared its third quarter 2012 financial results with both revenue and EPS surpassing the Zacks Consensus Estimate. In the reported quarter, Integrated Network Solution generated revenues of $499.6 million, up 8% year over year.

We believe that winning this contract will significantly improve its Integrated Network Solution order book, which was earlier enriched by an order worth $19 million from the U.S. Department of Veteran Affairs Office of Information and Technology. 

The current Zacks Consensus Estimate for Harris Corp. is pegged at $1.42 for the fourth quarter with a growth rate estimate of 14.30%. For 2012 and 2013, the Zacks Consensus Estimates stand at $5.20 and $5.17 with a growth rate of 7.68% and (0.65%), respectively.

Recommendation:

Currently, Harris Corp. has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

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