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Harris HH-VDL Radios to Spur Warfighter's Communication Grid

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Harris Corporation recently secured a five-year contract from the U.S. Air Force worth $130 million. Per the contract, the company will manufacture Hand Held Video Data Link (HH-VDL) radios to improve situational awareness and connectivity for warfighters.

The lightweight HH-VDL radios offer real-time aerial view of the battlespace to the ground forces through full-motion video and sensor data feeds from aircraft or unmanned aerial systems. By seamless transfer of highly sensitive data to and from multiple airborne assets through secure transmission facilities, Harris will extend the mobile communications network of the warfighters beyond conventional sources. This, in turn, will better equip the warfighters to effectively strategize moves to counter any active threat or neutralize potential enemy action.  

The real-time intelligence, surveillance and reconnaissance (ISR) information will be utilized by the U.S. Air Force to disseminate data from the air to warfighters on ground level. Harris’ HH-VDL radios offer a tactical advantage to a mobile defense force and are therefore a better fit to replace the existing incumbent ground ISR terminals operating at the tactical edge of the battlespace. In addition to increased capability, the radios will leverage state-of-the-art technology via Bandwidth Efficient Common Data Link, a communications waveform that enables secure, real-time distribution of time-sensitive data and full-motion video.    

The company has been a mission partner for the U.S. Air Force for over seven decades. The current contract reinforces Harris’ commitment to serve the Air Force in operations across any domain through the integration of air, space and cyber assets and is likely to augment its long-term revenues.  

With diligent execution of operational plans, Harris’ shares have outperformed the industry over the past six months with an average return of 6.2% compared with a rise of 2.6% for the latter.

Incidentally, the company tweaked its projection for fiscal 2018 owing to impressive performance in the fiscal third quarter. It expects fiscal 2018 adjusted earnings per share in the band of $6.45-$6.50, up from prior expectations of $6.30-$6.50. Fiscal 2018 revenues are expected to be approximately $6.14 billion, reflecting a year-over-year increase of 4% from the earlier expectations of $6.08-6.14 billion. The company also anticipates adjusted free cash flow between $900 million and $925 million, up from the previous guidance of approximately $900 million.

Harris currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include BlackBerry Limited (BB - Free Report) and Motorola Solutions, Inc. (MSI - Free Report) sporting a Zacks Rank #1 (Strong Buy) and Ubiquiti Networks, Inc. , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BlackBerry has a healthy long-term earnings growth expectation of 18.6%. It topped earnings estimates twice in the trailing four quarters, with an average beat of 500%.

Motorola has a long-term earnings growth expectation of 8%. It surpassed estimates in each of the trailing four quarters with an average positive earnings surprise of 12.1%.

Ubiquiti Networks has a long-term earnings growth expectation of 18.6%. It topped estimates thrice in the trailing four quarters with an average positive earnings surprise of 8.9%.

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