Harris Reports Preliminary Q3 Results; Lifts FY15 Adj. EPS View - Quick Facts

(RTTNews) - Harris Corp. (HRS) announced preliminary financial results for the third quarter of fiscal 2015 in order to expand timing options for completing the permanent debt financing for its pending acquisition of Exelis Inc. (XLS).

Third quarter fiscal 2015 income from continuing operations is estimated to be $126 million, or $1.20 per diluted share on a GAAP basis and $139 million, or $1.32 per share on a non-GAAP basis, excluding acquisition-related costs. In the prior year, income from continuing operations was $137 million, or $1.27 per diluted share.

Third quarter fiscal 2015 revenue and orders are estimated to be $1.19 billion and $1.21 billion, respectively, compared to $1.27 billion and $1.11 billion, respectively, in the prior year.

Analysts polled by Thomson Reuters expected the company to report earnings of $1.22 per share and revenues of $1.23 billion for the third-quarter. Analysts' estimates typically exclude special items.

Non-GAAP operating income performance in the third quarter was slightly better than management expected, benefiting from lower costs, excellent execution and a favorable product mix in RF Communications and Government Communications Systems. Revenue in the third quarter was somewhat weaker than expected. Higher year-over-year revenue in Tactical Communications, driven by continuing strength in international markets and a pickup in the U.S. market, was more than offset by further weakness in Public Safety, IT Services and CapRock energy business areas.

Harris increased its fiscal 2015 guidance for non-GAAP income from continuing operations per share to a range of $5.00 to $5.10 from the prior range of $4.95 to $5.05 per share.

Harris also updated fiscal 2015 revenue guidance from a decline in a range of 1 to 3 percent to an expected decline of about 4 percent. The fiscal 2015 non-GAAP guidance does not include any impact from the pending acquisition of Exelis. The fiscal 2015 GAAP results would include potential post-closing revenue and income attributable to Exelis, increased share count from the transaction, and acquisition-related costs that are expected to be in a range of $270 million to $290 million.

Wall Street currently is looking for fiscal year 2015 earnings of $5.04 per share on annual revenues of $4.88 billion.