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Harris Wins $400M Electronic Warfare IDIQ Contract Extension

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Harris Corporation (HRS - Free Report) recently announced that it has secured a $400 million increase in the ceiling value of a single-award IDIQ (Indefinite Deliverable Indefinite Quantity) contract during fourth-quarter fiscal 2018, taking the tally to $491 million. The deal entails supply of electronic warfare (EW) systems for international F-16 fighters to help protect the aircraft fleet against current and evolving electronic threats. The company has delivered EW solutions for a variety of airborne platforms for more than 60 years by enabling missions for strategic bombers, tactical fighters and rotary aircrafts. This allows the company to employ added F-16 electronic warfare system upgrades worldwide.

Per the deal, Harris will provide AN/ALQ-211(V)4/9 Advanced Integrated Defensive Electronic Warfare Suite (AIDEWS) systems, spares and engineering support to allied countries as part of a Foreign Military Sales contract through the U.S. Air Force. The ALQ-211 detects lethal threats and provides multi-spectral situational awareness. It establishes a threat range from the mission aircraft when the aircrew encounters a probable danger, and if an aircraft is in lethal range of the threat, it initiates an instantaneous response.

The ALQ-211 coordinates the response for laser and infrared threats, providing an integrated approach to aircraft self-protection. It is deployed into the CV-22 Osprey Special Operations aircraft, Norwegian NH 90 multi-mission helicopter and is currently on board in international F-16 fighters for Chile, Poland, Pakistan, Turkey and Oman. The Harris AIDEWS system provides allies with sophisticated, high-performance electronic protection and offers the flexibility needed to meet unique mission needs.

Top-Line Performance

Moving on, such contract wins are likely to enhance the company’s revenues, which has witnessed a compound annual growth rate of 16.7% from fiscal 2015 to fiscal 2018.

Share Price Performance

Over the past three months, shares of Harris have gained 5.7% compared with 8.7% growth for the industry.

Zacks Rank & Stocks to Consider

Harris currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Comtech Telecommunications Corp. (CMTL - Free Report) , Motorola Solutions, Inc. (MSI - Free Report) and QUALCOMM Incorporated (QCOM - Free Report) . While Comtech sports a Zacks Rank #1 (Strong Buy), Motorola and QUALCOMM carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.              

Comtech has a long-term earnings growth expectation of 5%. It beat earnings estimates in each of the trailing four quarters, the average being 123.7%.  

Motorola has a long-term earnings growth expectation of 8.5%. It beat earnings estimates in each of the trailing four quarters, the average being 11.8%.   

QUALCOMM has a long-term earnings growth expectation of 10.9%. It beat earnings estimates in each of the trailing four quarters, the average being 19.8%.   

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