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Harris (HRS) Wins US Navy Contract Worth $113 Million

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Leading communications equipment and service provider, Harris Corp. (HRS - Free Report) signed a four-year deal valued $113 million with the U.S. Naval Sea Systems Command (NAVSEA). Initially the contract had three one-year options and was worth $39 million.

Per the terms of the deal, Harris will help the NAVSEA team upgrade its long-range, three-dimensional defense radars. Also, Harris will help the department improve the AN/SPS-48E radars to a more superior SPS-48G origin, which employs a modern solid-state transmitter.

Meanwhile, the NAVSEA will gain from such upgrades which will not only help bring down the cost of radars but will also help the fleet counter impending threats better.

Earlier this year, Harris won two major contracts worth $70 million and $97 million, respectively, from the U.S. Navy Naval Air Systems Command (NAVAIR).

Per the agreement, Harris will deliver advanced self protection jammers to the NAVAIR for its integrated defensive electronic countermeasures (IDECM) program which will allow pilots and crew to avoid radio frequency threats.

Harris has also been awarded a $228 million IDIQ contract by the Space and Naval Warfare (SPAWAR) Systems Center Pacific in San Diego, CA, to aid the U.S. Navy’s maritime mine countermeasures (MCM) endeavors. The five-year contract incorporates a three-year base and two one-year options.

Meanwhile, Harris recently reported first-quarter 2016 financial results wherein the bottom line outpaced the Zacks Consensus Estimate while the top line fell marginally short of the same. However, revenues in the period improved 56% from the year-ago figure aided by the Exelis integration. In the reported quarter, company generated orders worth $164 million from the Tactical Radio Communications business.

Thus, we believe that continuous contract wins will certainly boost the company’s top line in the forthcoming quarters.

Harris currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Better-ranked stocks in this sector are InterDigital, Inc. (IDCC - Free Report) , Motorola Solutions, Inc. (MSI - Free Report) and TESSCO Technologies Inc. (TESS - Free Report) . InterDigital sports a Zacks Rank #1 (Strong Buy) while the other two carry a Zacks Rank #2 (Buy).

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